2022 will be a solar boom. That is, if supply chain constraints do not weaken the industry.
The U.S. energy information administration predicts that US solar companies will install 215 gigawatts of utility capacity this year, breaking the annual record of 15.5 gigawatts set last year.
However, the EIA forecast comes at a time when the industry is facing considerable uncertainty. The solar energy industries association, a trade organization, warned last month that supply chain constraints are driving up costs and may limit industry growth in 2022 (Climatewire, December 14, 2021).
Sylvia Leyva Martinez said: “developers are very pessimistic about their ability to complete the projects planned to be completed in 2022.” She tracks the utility solar industry in North America for wood Mackenzie, a consulting firm.
These forecasts are made at a time of transportation delays and rising equipment costs. Wood Mackenzie initially expected 22.5 GW of new solar power in 2022. However, the consulting company conducted a survey with top developers last year and lowered its forecast to 15gw after finding that nearly one-third of projects will be delayed.
Martinez said that developers are increasingly conducting complex contract negotiations with potential buyers. In the past, contracts were usually set at a fixed price. Now, new solar contracts include more price hedging, collars and other financial instruments to limit the risk of developers and potential buyers.
She said the contracts were a response to price increases caused by supply chain constraints caused by the pandemic.
“People take it for granted that market conditions will prevail, but that is no longer the case,” she said.
Some analysts are more optimistic about the prospects of solar energy in 2022. Tara Narayanan, Bloomberg’s solar analyst, said Bloomberg’s forecast for 2022 was only slightly more conservative than the EIA. She expects developers to overcome supply chain constraints and achieve record installation this year, but she points out that there may be some delays.
“A capacity of 20 gigawatts or more is huge,” Narayanan said. “In fact, you can get such a number. It can be said that it may be larger, which should tell you the direction of the industry.”
In fact, it is generally believed that the difficulty of solar energy is temporary. Martinez said that developers will benefit from improved procurement strategies and increased manufacturing output to meet the growing demand for solar devices.
Martinez and Narayanan both said they expected an annual installed capacity of at least 20GW in the next few years.
These forecasts reflect the huge growth of the industry in recent years. According to EIA data, the United States installed 15.6 GW of solar energy between 2017 and 2019, and then installed 10.4 GW and 15.5 GW respectively, 2020 and 2021 respectively.
In contrast, the EIA said that the United States is expected to register 17.1 watts of new capacity in 2021 after adding 7.6 kilowatts of wind energy this year. The natural gas addition is 6.3 GW in 2021 and is expected to reach 9.6 GW in 2022.
The vigorous development of solar energy industry has particularly important potential in Texas and other states, where the solar energy industry has exploded.
As of 2017, the installed capacity of solar energy in guxing Prefecture was less than 1GW. Texas installed 2.4 GW and 3.6 GW in 2020 and 2021, respectively. The EIA predicts that the state will install 6.1 GW of solar energy in 2022, leading the country in the scale of utility installation for the third consecutive year.
Because Texas has a large coal fleet, Texas power plants have long been the leader in greenhouse gas emissions in the country. According to EPA data, in 2020, power plants in Texas emitted more than 200 million tons of carbon dioxide, accounting for about 12% of the total emissions of the U.S. power sector.
But Daniel Cohan, who tracks the electricity market at Rice University, said solar heat could erode the footprint of coal in Texas. This is because many coal-fired power plants rely on high electricity prices to make money during the increase of power demand in summer. Solar power generation matches the period of high demand, which will bring downward pressure on wholesale electricity prices.
“Solar energy may become a coal killer because it generates electricity when coal power plants make the most money,” Cohen said.
Reprinted from E & amp; amp; amp; nbsp; with the permission of politico, LLC; E news. Copyright 2022. E& E news provides important news for energy and environmental professionals.