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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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The U.S. Solar Boom Is Still Facing Some Major Roadblocks

  • Despite record-breaking solar power installation projected for 2023, current delays are caused by supply chain bottlenecks, trade tensions, bureaucratic red tape and reliance on Asia for 80% of solar panel supplies 
  • Long term challenges include lack of available land suitable for large scale renewable projects, slow permitting processes, grid connection issues, and legislative uncertainty.
  • The SEIA projects that annual growth will average 21% between 2023-2027 thanks to government stimulus package.
Solar Power

The United States is making a major bid to become competitive with China in clean energy supply chains. After neglecting domestic renewable energy manufacturing and production capacity for decades thanks to a powerful combination of cheap shale oil and gas and systematic inertia, the Biden administration’s Inflation Reduction Act seeks to put the United States back at the forefront of the global energy sector. But overcoming reliance on China, which currently dominates supply chains for solar panels and key rare earth minerals, won’t be quick or easy. A U.S. solar revolution is coming – just not this year.

The Inflation Reduction Act, while it does nothing to curb inflation, is the most ambitious climate law in United States history. The bill earmarks $370 billion for spending on clean energy, and has the potential to bring domestic clean energy manufacturing and production capacity growth to new heights. But before all that money can hit its mark, the industry has some major kinks to work out.

This doesn’t mean that solar power installation is flagging; on the contrary, it’s projected to reach record levels in 2023, with about 27.9 gigawatts of expected added capacity according to Wood Mackenzie. But the numbers predicted for this year pale in comparison to those slated for a few years from now. At present, the solar boom faces massive delays thanks to supply chain bottlenecks, trade tensions, bureaucratic red tape, securing sufficient land tracts, and delays in connecting to the grid. 

These hurdles also include the selfsame dependence on China that the Act seeks to minimize. The United States currently relies on Asia for 80% of its solar panel supply – at a minimum. This is a problem on a good day, but has become a serious issue in recent months as the United States has increased economic pressure on China in order to condemn ongoing human rights abuses against the Uyghur ethnic minority in Northwest China. This region happens to be where about half of the world’s supply of polysilicon – an essential component of solar panels – is sourced. This means that putting restrictions on imports of materials from the Xinjiang region is not only hurting the Chinese economy, but also hurting the U.S. solar industry. 

There are even greater and more long-term challenges to the solar energy revolution, however. The first of these is land. Creating large scale solar and wind farms requires a whole lot of land “at a time when the availability of suitable, economically desirable land is getting tighter,” according to a recent report from McKinsey. In fact, utility-scale solar and wind farms need a whopping ten times as much space per unit of power as coal and natural gas plants. Already, the renewable energy sector’s expansion is causing tensions in rural areas where locals are less than thrilled about having the renewable revolution take place in their backyard. Already, U.S. solar expansion is being stalled by rural land-use protests, and the big solar boom hasn’t even begun in earnest.

And then there are issues of bureaucratic red tape and grid bottlenecks, which are slowing everything to a crawl at certain critical moments of solar development and deployment. These can include impossibly slow and complex permitting processes and long wait times to connect finished solar projects to existing power grids, which are largely unprepared for an influx of solar energy. 

There are also, ironically, problems stemming from the Biden administration’s stimulus itself. While solar power companies have been given a massive boost through the Inflation Reduction Act, the provision is so big and so new that there is still a lot of uncertainty about the fine print which “will likely constrain solar panel installations this year” according to reporting from Bloomberg this week. 

Still, despite all of these challenges, the outlook is rosy for solar. There is great momentum building around the world to decarbonize the global economy, and landmark legislation like the Inflation Reduction Act is making sure to provide a catalyst. The future lies in renewables, and no one wants to be left behind – least of all the United States. The Solar Energy Industries Association (SEIA) projects annual solar growth averaging 21% between 2023 and 2027 thanks to the Inflation Reduction Act, and experts say that we will continue to see the impact of the bill for decades to come. 

By Haley Zaremba for Oilprice.com

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