Policy shifts cause slowing clean power growth even as Q1 2022 brings record capacity

A new Clean Power Market Report Q1 2022 released by the American Clean Power Association (ACP) this week trumpeted a record 6.6 GW of utility-scale clean power capacity additions for the United States but warned of slowing growth due to policy blocks and other delays.

“The record-breaking quarter for clean power is encouraging, but the industry still faces many hurdles that are stalling growth,” ACP CEO Heather Zichal said. “Ongoing uncertainty from the Department of Commerce’s unwarranted solar tariff case, the unsettled fate of clean energy tax credits, supply chain issues, and inflation are all making investment and planning decisions a difficult challenge. The industry needs resolution and policy clarity if we are to meet the Biden administration’s clean power goals of reaching a net zero grid by 2035.”

On the plus side, capacity gains were particularly favorable early this year due to major improvements in battery storage installation – 173 percent, compared to last year. Solar also rose 11 percent, but wind power deployment fell 3 percent. Overall the picture was less rosy, with the rate of growth slowing to 11 percent.

Between 2019 and 2021, the industry’s year-over-year growth rate hit 50 percent.

Currently, the nation’s operating clean power capacity is nearly 208 GW, or enough to power 57 million homes. In the first quarter of the year, 90 new projects amounted to $9.3 billion in capital investments. In particular, 56 new solar projects brought 2,997 MW of capacity, while 10 wind projects brought another 2,865 MW. Despite its banner year, battery storage still brought less of a footprint, deploying 758 MW of new capacity total.

For solar, the last couple of years have already been difficult due to the ongoing pandemic, which caused supply chain issues, among others. Its woes worsened when the U.S. Department of Commerce announced an investigation into solar manufacturing in Southeast Asia, contemplating the application of anti-dumping and countervailing duties against solar module manufacturers located there. The industry is highly dependent on those items. The ACP reported that, due to the inquiry and a lack of modules, at least 65 percent of the nearly 37 GW of expected projects through 2023 are at risk of cancellation or delay.

As of the end of Q1 2022, 14.8 GW of capacity has been delayed. The bulk – 58 percent – of these delays were in the solar industry, which occurred before the Department of Commerce inquiry. The ACP expects things to worsen for solar deployment at least through 2023. Still, solar represents the leading clean power technology under development.

Overall, the clean power pipeline grew 4 percent during the first quarter. In contrast, the pipeline rose 12 percent quarterly throughout 2021.