U.S. Senate passes historic clean energy bill; EIA lowers 2022 solar forecast
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Senate passes climate bill that could accelerate solar fivefold
The U.S. Senate passed $370 billion of clean energy measures in a transformational bill that could put the country back on track towards President Biden's climate goals.
The Inflation Reduction Act includes sweeping measures to accelerate solar, wind and energy storage and could be voted on by the House of Representatives as early as this week.
The Act extends tax credits for solar and wind and allows stand-alone storage projects to qualify for the first time. The bill also includes tax credits for the manufacturing of solar and wind components.
The measures could hike annual utility-scale solar installations to 49 GW by 2025, five times higher than in 2020, Princeton University said in a special report. Wind installations could rise almost threefold to 39 GW/year by 2025 and solar growth rates would continue to increase thereafter, it said.
U.S. solar installations must quadruple to around 60 GW/year by the middle of the decade and 70 GW/year in 2031-2035 to meet President Biden's goal of a decarbonised power sector by 2035, the Department of Energy (DOE) said in a report last year.
Last week, Democrat Senator Joe Manchin agreed to support the bill following months of deadlock with the Biden administration. Manchin is Senator for coal-reliant West Virginia and his support is critical for passage of the legislation in the evenly divided Senate as it lacks any Republican backing.
The bill also offers incentives to purchase electric vehicles and energy efficient appliances and would channel billions of dollars into measures that protect against wildfires and extreme heat.
The bill would reduce carbon emissions by roughly 40% by 2030, Senate Majority Leader Chuck Schumer said. Biden aims to cut U.S. emissions by at least 50% by 2030.
“This legislation is the most transformational investment America has ever made in our climate future," Abigail Ross Hopper, CEO of the Solar Energy Industries Association (SEIA), said. "Now the work can begin to build out America’s clean energy economy with historic deployment, domestic manufacturing, investments in low-income communities, energy storage, smoother interconnection, and so much more."
The bill sets out a total $430 billion of spending pledges, including measures to reduce drug costs and close tax loopholes. Democrats said the measures would reduce the federal deficit and help lower inflation.
EIA lowers 2022 solar forecast after first-half slowdown
The U.S. Energy Information Administration (EIA) has lowered its 2022 utility-scale solar installation forecast by 3.7 GW to 17.8 GW after supply chain disruption and import tariff uncertainty slowed first-half activity.
Developers installed a record 17 GW of utility-scale solar in 2021 and followed this with 4.2 GW in the first half of this year, EIA said, based on data reported by developers. Installations typically accelerate towards the end of the year as developers strive to meet tax credit deadlines.
Forecast U.S. utility-scale solar installations in 2022
(Click image to enlarge)
Source: U.S. Energy Information Administration (EIA), August 2022.
Soaring global materials prices and supply chain constraints have pushed up solar project prices and dented growth.
U.S. developers have faced additional price uncertainty following an investigation by the U.S. commerce department into import tariffs on the four largest supplier countries in Southeast Asia. In response, President Biden waived import tariffs on solar panels from Malaysia, Thailand, Vietnam and Cambodia for two years in an attempt to ease the uncertainty that has delayed projects and curbed investments.
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