US third quarter utility battery storage, onshore wind, and solar PV installations declined to a three-year low of 3.43GW, as project interconnection and supply chain challenges together conspired to to continue ot hobble growth, according to last figures from the American Clean Power Association (ACP).
Quarterly installs of renewable energy technology fell 22% compared to a year earlier and were also down 18% in the first nine months to 14.2GW versus the same 2021 period.
“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 at ACP, a national trade group based in Washington, DC.
Onshore wind had its worst quarterly performance in nine years with 356MW commissioned, off 78% from a year earlier, while installs through 30 September were 4.1GW versus 7.2GW in 2021.
In its report, Clean Power Quarterly 2022 Q3, ACP blamed the disappointing result on phase down of the production tax credit (PTC), the main federal incentive for land-based wind that expired at the end of last year, “ever-growing” difficulties for projects to secure interconnections in regional grid queues, and supply chain-induced delays.
Softness in onshore wind had been expected given the PTC had been stepping down over the last several years, according to ACP.
While the Inflation Reduction Act, the country's new climate law, delivered the long-term tax policy certainty the industry has been requesting, it will take some time for this policy certainty to be reflected in the market, John Hensley, vice president research and analytics, said on a call with reporters.
He said "many" projects are experiencing grid synchronisation delays and in some cases, involve substation energisation that slows delivery of electricity to customers.
Projects also face ongoing supply chain challenges. "We saw difficulty sourcing components, arranging transportation, logistics, and the availability of construction crews and equipment. They have all slowed installation times for wind projects,” said Hensley.
Nearly 14.2GW of clean power projects were delayed in the quarter for these and other reasons, of which more than half had already experienced delays. Overall, ACP is tracking more than 36GW of capacity facing delays and a further 3.5GW was cancelled by developers because of them.
While the development pipeline did grow 3% in the quarter, this was down from 12% quarterly growth in 2021.
On 30 September, the US had 139.8GW of turbines spinning nationwide, all but 42MW onshore, second globally behind China.
Utility solar installs were a disappointing 1.88GW, down 23% compared to third quarter 2021. It was the slowest quarter in two years as developers continued to have problems sourcing panels, according to the report.
“The solar market has faced repeated delays as companies struggle to obtain panels as a result of an opaque and slow-moving process at US Customs and Border Protection,” said Sandberg, a reference to the Uyghur Forced Labour Prevention Act (UFLPA) that took effect in June.
The law addresses alleged human rights abuses in China’s Xinjiang region, a major supply source for polysilicon, cells, and other critical components in solar panels.
US Customs began using so-called withhold-release orders (WROs) to detain products thought to contain polysilicon from Xinjiang. The agency later began asking for documentation that quartzite, a key ingredient of polysilicon, was not mined in the region.
While the presumption that any product using any inputs from Xinjiang benefited from forced labor is rebuttable, the process for doing this can take weeks, even months, with more than 3GW of panels in mid-August said to be languishing in warehouses.
Vanessa Sciarra, vice president, trade and international competitiveness, said the industry has been consistently asking Customs for a clear timeline and process that can facilitate importation of panels while ensuring they were not made with forced labour.
“I think we’re feeling a little bit frustrated with the fact we’re not getting as much guidance as we would like,” she said.
The industry installed 7.07GW this year through September, off 17% from a year earlier, but still the second most on record.
“Yet, 2022 was previously expected to be a banner year for solar, prior to import detainments that have prevented projects from progressing towards completion,” ACP said in the report.
There is now 68.4GW of utility solar in commercial operation across the US with California leading all states with 16.8GW, then Texas (10.4GW), and North Carolina (5.9GW).
Battery storage was the lone bright spot in the quarter with 1.19GW (2.77GWh) of projects coming online versus 220MW a year earlier. In the first nine months, installations totaled 3.06GW, more than double 1.28GW in 2021.
ACP said there was more than 132GW of clean power capacity in development on 30 September, 39GW under construction and 93GW in advanced development. Solar constitutes 59% of the pipeline, onshore wind 17%, offshore wind 13%, and battery storage 11%.
Inflation Reduction Act catalyst
Looking into 2023, Sandberg said the IRA – is set to catalyse clean energy growth.
“ACP anticipates that the IRA will give the industry the tools it needs to more than triple annual installations of wind, solar, and battery storage by the end of the decade,” he said, adding that the trade group expects it to to deliver 550GW of new capacity by 2030, representing $600bn in capital investment.
The landmark law includes $369bn for climate-related spending and multi-year clean energy tax credits but there was no incentive for construction of badly needed long-haul transmission lines.
Lawmakers also left it to the Federal Energy Regulatory Commission (FERC), regional grid operators, and state utility overseers to untangle bloated interconnection queues.
Sandberg also said ACP and the industry will continue to push for reforms that simplify federal permitting processes in a responsible way, a pressing issue that is holding back the country's development potential but was not addressed by the climate law.
"I don't think anybody is suggesting we are going to work around existing environmental laws, but I think there are ways for us to improve and streamline the process and move it forward. Some of our technologies will greatly benefit from that from a deployment perspective," he said.
