New Q1 Report Shows Clean Energy Growth Slowing
The last few years, renewable energy has seen record growth worldwide. The American Clean Power Association’s (ACP)
Q1 market report shows that 6,619 megawatts (MW) of utility-scale power capacity was installed in homes across the US. The industry saw storage installations go up by 173% and solar by 11% compared with Q1 of last year. And speaking of last year, 38% of the world’s electricity in 2021 was generated through renewable sources.
But the report also suggested that the industry is hitting headwinds. Supply chain delays, inflation, and uncertainty around energy tax credits and potential tariffs threaten the progress made in renewables.
American Clean Power Association: CLEANPOWER 2022 | Day 1 Highlights, May 18, 2022.
American Clean Power Association: CLEANPOWER 2022 | Day 2 Highlights, May 19, 2022.
Why This Matters
The climate data is clear: the world needs to decarbonize fast. A recent study found there’s a 50-50 chance of the earth breaking the 1.5-degree Celsius limit, and the best way to improve the odds of preventing global warming is to phase out fossil fuels for renewable sources of energy. The US has big ambitions to cut planet-warming greenhouse gas emissions by at least 50% below 2005 levels by 2030. To reach that target, the Biden Administration intends to install 30GW of offshore wind capacity throughout the US by 2030 and raise solar energy supply from 3% to 40% of the nation’s electricity needs. That means the industry’s slowdown is a troubling sign.
International Renewable Energy Agency: World Energy Transitions Outlook 2022, March 22, 2022.
CNBC: How The U.S. Can Build A 100% Clean Grid, January 27, 2021.
IEA: A 10-Point Plan to Cut Oil Use, March 18, 2022.
The Renewable Hold-up
Innovations in clean energy and lower costs have allowed renewables to explode over the last few years. The momentum around clean energy was strong enough to buoy the industry through the Trump years, even with the former administration’s open hostility toward renewables. Still, the clean energy sector needs policy support to keep going, which is hardly guaranteed.
Due to specious claims from solar company Auxin, the US Department of Commerce is investigating solar panel makers in Cambodia, Malaysia, Thailand, and Vietnam. As a result, retroactive tariffs as high as 250% could be placed on solar manufacturers, putting enormous pressure on the industry. The threat of these tariffs is already slowing solar installation, as hundreds of large-scale solar projects have been canceled or delayed. And, with the Build Back Better proposal having withered in Congress, tax credits for renewables are up in the air.
“The industry needs resolution and policy clarity if we are to meet the Biden administration’s clean power goals of reaching a net-zero grid by 2035,” stated Zichal.
American Clean Power Association: ACP Press Conference | Clean Power Annual Market Report 2021, May 17, 2022.
WW0: Heather Zichal and Amanda Little WW0 Facebook Live conversation broadcast on February 18, 2021.