The verdict is pending as some uncertainty looms, but with the rocky road of last year’s supply chain issues, material sourcing investigations, and some market segment dips shrinking in the rearview, 2023 could be a rebound year for the solar industry.
According to the Solar Energy Industries Association (SEIA), residential installations had a record year in 2021 with a 40 percent increase, however, other solar market segments in 2022 were significantly affected by worsening supply chain issues. Utility-scale solar, for example, experienced a 31 percent drop.
Strains on supply chains are largely due to increased demand. China has been integral in driving down solar PV costs internationally — accounting for 80 percent of all crucial solar panel manufacturing stages — sending the global green energy shift into overdrive.
To be on track with the International Energy Agency’s 2050 net zero emissions goal, yearly solar PV additions to electrical systems worldwide need to quintuple over the next seven years.
The exponential expansion in manufacturing and deployment to meet these demands has the global community scrambling to quickly develop strong and adaptable supply chains.
Beyond the boom in solar PV demand, other complications contributing to supply chain challenges and the solar community at large have been related to new anti-circumvention tariffs and questions raised about the ethical sourcing of materials in China — specifically investigations into the forced labor of Uyghur Muslims.
Since the passing of the Uyghur Forced Labor Prevention Act in December of 2021, over a thousand solar component shipments from China have been seized at U.S. ports.
Solar companies have been making assertive supply chain adjustments to avoid unethically sourced solar materials to ensure U.S. solar installations are not connected to solar slavery.
2022 experienced a 16 percent drop in new solar capacity as a result of the aforementioned obstacles. Community solar installations also dropped by 16 percent while commercial solar installations saw a 6 percent decrease.
Going forward, positive effects from the Inflation Reduction Act’s financing, incentivising, expedited deployment, and overall investment in clean energy should become more evident while policy mechanisms like the Solar Investment Tax Credit (ITC) make residential and commercial solar installations more affordable for homeowners and business owners through the next decade.
According to the U.S. Energy Information Association (EIA), if planned capacity stays on track, 2023 will be a record year for utility-scale solar with over 40 percent of new solar capacity being attributed to California and Texas.
While it is true that sourcing and manufacturing solar materials is an emissions nightmare, particularly in coal-dependent regions of China, the emissions from manufacturing a solar panel can actually be offset by the panel in just a few months. Decarbonization is not just exponential, it is inevitable.
The coming decade bodes well for the solar industry. Diversification of manufacturing and deployment will ensure fewer subsequent supply chain hiccups, guaranteeing steady solar growth globally and greener days to come. Contact Gurr Brothers Energy today and become part of the 2023 solar rebound!
May 9, 2023
Author: Hunter S.
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