If President Joe Biden’s Build Back Better Act is enacted, the US is projected to install 43.5 gigawatts (GW) of additional solar capacity over the baseline forecast between 2022 and 2026. This would bring cumulative solar capacity in the US to over 300 GW – triple the amount of solar currently deployed, according to the US Solar Market Insight report released today by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
Solar projects will continue to face supply chain challenges in the short term, and rising prices are impacting the utility-scale solar market the most. Prices in this segment dropped by 12% between first quarter 2019 and first quarter 2021, but spikes in the last six months have erased price declines from that two-year period.
Due to supply chain constraints and logistics challenges, Wood Mackenzie has lowered its 2022 solar forecast by 25%, a decrease of 7.4 GW.
However, new forecasts show that the clean energy provisions in the Build Back Better Act would stimulate solar market growth.
The Build Back Better Act includes tax credits that can cut the cost of installing rooftop solar panels by about 30%, shortening the payback period by around five years. The legislation would enable the solar industry to continue on its robust growth trajectory, incentivize domestic manufacturing, and alleviate supply chain constraints.
SEIA president and CEO Abigail Ross Hopper said:
The forecasts are clear: We must pass the Build Back Better Act to create quality American jobs, drive transformative solar and storage growth, and overcome supply chain bottlenecks.
This legislation will help US solar capacity triple over the next five years and offset an additional 83 million metric tons of carbon. Conversely, trade and supply chain headwinds will cause a significant decrease in installations next year at a time when more solar adoption is critical to addressing the climate crisis. This makes the domestic production provisions of the Build Back Better Act even more important to the future health of the US industry.
Meanwhile, SolarReviews, a US consumer reviews website for solar panel installation, reported today that in 2021, extreme weather, rising gas prices, and electric vehicle adoption drove interest in rooftop solar and at-home battery storage.
There was a 358% increase in solar requests from California following summer wildfires, an 850% increase in solar requests from Texas following the Texas power crisis, and a 919% increase in solar requests from Oregon following the Pacific Northwest heatwave.
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