2022 Renewable Energy Deployment Down 16% Due to Supply Chain Woes

General supply chain issues together with some industry-particular problems created massive project delays last year, leading to an unexpected decline in new renewable energy capacity.

Demand for renewable energy has sky-rocketed over the last decade and 2022 was supposed to be no exception, with experts projecting 30% growth.

Well, the numbers are now in and those predictions didn't even come close to panning out. Quite the reverse, in fact.

According to a just-released report from The American Clean Power Association (ACP)  instead of accelerating by 30%, 2022 saw U.S. renewable energy deployment drop by 16%.

But the problem wasn't waning interest. Just focusing on the demand side, 2022 should have been the banner year energy analysts were predicting. The problem was entirely on the supply side.

General supply chain issues together with some unique headaches afflicting the solar industry caused over 48 Gigawatts (GW) of renewable energy projects to be delayed in 2022, with solar accounting for 30 GW or 64% of the total.

All told,  U.S. clean power capacity grew by 25 GW last year. So that 30 GW of canceled solar projects alone would have been more than enough to boost 2022's total well beyond the 30% increase analysts were expecting.

Solar panel shortage

The shortages plaguing the solar industry arose from a number of causes.

  • The price of steel—a major component in both the racking used to hold up solar panels as well as manufacturing them—tripled.

  • Copper prices shot up as well, translating into more expensive wiring.

  • Concerns about slave labor caused the U.S. to ban all imports of silica from a region of China which is one of the world's largest sources of the key solar panel ingredient. As a result, hundreds of megawatts of panels were seized at the border.

  • In February 2022, the Biden administration extended his predecessor's “Section 201” tariffs on solar panels for an additional four years.

Since around 90% of solar panels used in the U.S. are imported, the border seizures and tariffs made the general supply chain issues every industry was dealing with substantially worse for solar.

Qualified good news

The ACP's report wasn't all bad news, however.  Though 2022 turned out to be disappointing as a whole, by year's end the shortages that created the drop in renewable energy deployment had started to subside.

The result was that, in the fourth quarter, renewable energy deployment ramped up.

But, as welcome as the end-of-the-year increase was, the total still wound up being the lowest fourth-quarter deployment of renewable energy since 2019.

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