US solar installs jump to 5 GW in Q1; Germany to hike solar target to 150 GW
Our pick of the latest solar news you need to know.
US solar installs rise 46% in first quarter
US solar installations in the first quarter rose by 46% on a year ago to 5 GW due to continuing growth in the utility-scale market and a spill-over of projects initially targeting 2020 tax credit deadlines, the Solar Energy Industry Association (SEIA) and Wood Mackenzie said in their latest quarterly report June 15. The US is on track to install 24.4 GW of solar power this year, an increase of nearly 24% on last year, and is expected to hit new records in 2022 and 2023, the report said.
Falling costs and rising demand from corporate customers and utilities are opening up new opportunities for solar development. Utility-scale solar installations hit a first-quarter record of 3.6 GW, of which 1.4 GW was in Texas, the fastest-growing market.
Last year, US solar installations hiked by 43% to a record 19.2 GW as developers overcame Covid-19 disruptions to meet annual tax credit deadlines. In December, Congress took the pressure off developers by agreeing to extend the investment tax credit (ITC) for solar projects by two years as part of a COVID-19 recovery package. The solar ITC will now remain at 26% for projects that start construction in 2021-2022 and fall to 22% in 2023 and 10% in 2024.
Solar installations are forecast to hit new records for the next three years before the ITC fully phases down, Wood Mackenzie said. Some 160 GW of solar capacity will be installed between 2021 and 2026, raising the total installed capacity to over 250 GW, it said.
US solar installation forecast
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Source: SEIA, Wood Mackenzie, June 2021
The outlook could rise further if Congress agrees President Biden's plans to extend the ITC by 10 years and increase grid spending as part of a new $2-trillion infrastructure package unveiled in March.
The Biden administration also aims to pass a new law requiring utilities to source more power from renewable energy sources to meet its target of decarbonising the US power sector by 2035.
Despite higher installations, solar employment fell by 6.7% last year as coronavirus restrictions curbed activity and labour productivity rose in the fast-growing utility-scale segment.
Developers face significant cost pressure going forward. Covid restrictions have driven up the cost of raw materials and shipping and some participants fear sharp solar growth and new labour requirements proposed by the Biden administration could hike labour costs.
First Solar to double US module output
First solar is to build a 3.3 GW solar module manufacturing plant in Ohio, its third factory in the state, raising its US annual production capacity to 6 GW.
The new $680 million plant will be located next to two existing First Solar factories at Lake Township in northern Ohio and will start operating in the first half of 2023, the company said June 9. The plant will reach full nameplate capacity in 2025, creating the largest fully vertically integrated solar manufacturing complex outside of China, the company said.
First solar is the only US module manufacturer to use thin film technology rather than crystalline silicon. The new plant will create 500 direct jobs and will comprise of a state-of-the-art production line, the company said. The whole Lake Township complex will be able to produce one module every 2.75 seconds, it said.
“While designing and building this factory of the future we’re challenging ourselves to focus on the continuous improvement of our throughput, quality, and safety through automation without losing sight of our greatest strength, our people,” Mike Koralewski, chief manufacturing operations officer at First Solar, said.
“We see this as an opportunity for our associates to upskill, learn new technologies, continue to grow and develop themselves,” he said.
In January, First Solar agreed to sell a 10 GW pipeline of US solar projects to Leeward Renewable Energy as it concentrates its activities around module manufacturing.
This followed the closure of First Solar's engineering and procurement construction (EPC) business and the sale of its North American operations and maintenance (O&M) business to NovaSource, a new O&M company created by Toronto-based private equity firm Clairvest Group.
Germany to raise 2030 solar target to 150 GW
Germany's government plans to increase its 2030 solar capacity target by 50 GW to 150 GW, according to a draft law seen by Reuters June 2.
Germany currently has around 52 GW of installed solar power and 55 GW of onshore wind. Under the draft law, the target for onshore wind will rise by 24 GW to 95 GW. The law proposes 7.8 billion euros ($9.5 billion) of funding for climate protection measures next year, including 2.5 billion euros for building refurbishment and an extra 1.8 billion euros for subsidies for electric car purchases. The government would also double its support for industry measures to cut carbon emissions. These financial pledges can only be approved after the German federal election in September.
The move comes after Germany's Constitutional Court ruled in April that Chancellor Angela Merkel's coalition government had failed to set out how to cut carbon emissions beyond 2030.
In April, the government agreed to triple annual solar auction capacity to 6 GW in 2022. The new tender capacity aims to increase the share of renewable energy to 65% of power generation by 2030. Renewables currently represent around 50% of generation.
Germany installed 4.8 GW of solar power in 2020 and was already forecast to lead growth in Europe in the coming years.
Forecast solar installs in Europe by country in 2021-2024
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Source: SolarPower Europe, December 2020
Germany will also tender for 4 GW of onshore wind in 2022, up from 2.9 GW in previous plans, and continue with regular offshore wind tenders.
The government will also cut the renewable power surcharge on consumers' power bills from 60 euros/MWh in 2022 to 50 euros/MWh in 2023 and 2024, it said.