Clean Energy Industry Poised to Capitalize on IRA Passage, but Lingering Policy Issues Lead to Slowest Quarter In 3 Years

While the clean energy industry celebrated the August passage of the Inflation Reduction Act (IRA), the largest clean energy investment in U.S. history, policy challenges continued to limit clean power growth in the third quarter, according to a new report released by the American Clean Power Association (ACP).From July to September of 2022, 3.4 gigawatts (GW) of new utility-scale clean power capacity were installed, bringing 2022 year-to-date installations to 14.2 GW, according to the Clean Power Quarterly Market Report. Installations were down 22% compared to the third quarter of 2021, and down 18% year-to-date. Quarterly wind installations fell 78%, while solar installations dropped 23%. Only battery storage, which commissioned 1.2 GW this quarter, increased installations compared to the third quarter of 2021. Storage is having its best year on record, with 2022 installations already nearly even with total 2021 volumes.

Project delays weighed heavily on installation volumes as developers struggled to procure solar panels, faced supply chain challenges, and confronted ever-growing interconnection queues to connect projects to the grid. In total, 14 GW of clean power capacity was delayed this quarter, adding to a growing backlog of delayed projects that totals 36 GW – 63% of which are solar projects.“While the IRA is set to catalyze clean energy growth, the industry continues to deal with policy and regulatory challenges hindering development and deployment of clean power,” said JC Sandberg, Interim CEO and Chief Advocacy Officer.

“The solar market has faced repeated delays as companies struggle to obtain panels as a result of an opaque and slow-moving process at U.S. Customs and Border Protection. Policy uncertainty around tax incentives constrained wind development, underscoring the near-term need for clear guidance from the Treasury Department so the industry can deliver on the promise of the IRA. Storage was the one bright spot for the industry and had its second-best quarter on record,” Sandberg continued. “The aggressive deployment of storage continues to drive down consumer energy costs and enhance grid reliability.”Overall, Texas and California had the biggest clean power deployments including large-scale wind, solar and battery hybrid developments, and standalone storage. Amazon was the largest purchaser of the quarter after announcing another 2 GW of clean power procurement in the US.

“ACP anticipates that the IRA will give industry the tools it needs to more than triple annual installations of wind, solar, and battery storage by the end of the decade. We expect the IRA to deliver 550 GW of new capacity by 2030, representing $600 billion in capital investment and growing the clean power workforce to nearly a million strong by 2030. We continue to work with relevant government decision-makers to quickly resolve remaining tax guidance, supply chain, and trade challenges to realize the IRA’s full potential. This is essential to set the nation on a path to achieve its clean energy goals,” concluded Sandberg.

Source:Evwind

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