This spring, President Joe Biden gave a shot in the arm to solar and other clean-energy technologies with a couple of important executive actions. The move comes at a critical time, since Congress has yet to pass comprehensive legislation needed to help fight climate change.
Fossil fuels still make up the largest share of electricity generation in the United States, but renewables have chipped away at dirty power and now represent the majority of new power sources coming online.
Wind is behind nearly half of all electricity generation from renewables, but a lot of solar is waiting in the wings. Berkeley Labs reports that solar combined with battery storage accounted for 85 percent of new capacity awaiting grid connection at the end of 2021.
The last decade has been a big one for solar, with a 40-fold increase in electricity-generation capacity between 2010 and 2021.
That has a lot to do with solar panel costs coming down and efficiency going up. In 2010, the price for residential solar was $7.53 per watt — that fell to $2.65 at the beginning of 2021. Over the same time, utility-scale solar dropped from $5.66 per watt to $0.89.
But not everything about solar is bright this year. The outlook dimmed a bit as economic and political forces squeezed the industry.
Solar modules manufactured by Giga Solar. Photo credit: Solar Giga (CC BY-NC-ND 2.0) / The Revelator
Federal Action
The first quarter of the year wasn’t a good one for solar — installations fell 24 percent compared to the first quarter of last year.
One of the biggest issues stems from a Department of Commerce investigation into whether China is skirting import duties by shipping solar components through a handful of Southeast Asian nations. That’s led to a threat of new tariffs, which has put nearly two-thirds of planned US solar installations in jeopardy, according to a report from industry researcher Rystad Energy.
It’s put the Biden administration’s climate agenda in peril.
To counter that, the administration in June announced a two-year tariff exemption on solar panels from Cambodia, Malaysia, Thailand, and Vietnam as a result of the Commerce investigation.
Those four countries account for about 80 percent of the US supply of solar modules, which is why most US solar companies welcomed the news.
“The 24-month tariff extension offers some certainty at a time when it is needed most, and it buys some time for industrial clean energy policies like long-term tax credits and manufacturing incentives to be put into place,” reported PV Magazine.
About two-thirds of solar industry jobs in the United States are in the development and installation of projects, with only 14 percent in manufacturing, according to Canary Media.
Of course, the companies that do manufacture in the United States, like Auxin Solar, weren’t excited by Biden’s action.
But the president also took action to boost domestic production by invoking the Defense Protection Act to kickstart the manufacturing of solar panel parts and other clean energy-related technologies, including insulation, heat pumps, and materials needed for power-grid infrastructure.
Additionally, the administration hopes to spur more domestic solar manufacturing capacity by using the federal procurement process to streamline government purchasing.
Now come a few more critical steps. Congress needs to get to work funding these initiatives, and homeowners and businesses need incentives to start buying the products.
Regional Growth
Action on solar hasn’t been confined to DC.
Florida scored a defensive solar win, which came from a somewhat unlikely source: Republican Gov. Ron DeSantis, not normally a pal to environmentalists. In April, he vetoed a bill that would have set back the state’s burgeoning solar industry by reducing how much money homeowners with rooftop solar get from the extra power they send back to the grid.
In Puerto Rico, residents are tapping solar and storage systems on their road to recovery and resilience after a duo of devastating hurricanes hit the island in 2017. There are now more than eighttimes as many rooftop solar systems compared to 2016. Much of the growth has been spurred by grassroots efforts, though, and residents say more help from the government and utilities is still needed.
New York, meanwhile, is using the power of the sun to edge closer to its goal of getting 70 percent of its electricity from renewables by 2030. On June 2, state officials announced contracts for 22 large-scale solar and energy storage projects with enough capacity to power 620,000 homes. It’s the largest land-based procurement so far for the state and will add more than 2 gigawatts of solar and 160 megawatts of storage.
Siting Concerns
A significant advancement came from Maryland, where the state legislature passed House Bill 1039 to exempt solar projects from county and municipal property taxes if half of the electricity they generate goes to low-to-moderate income customers at a cost that’s 20 percent lower than the base rate of the local utility.
That’s good for climate equity. But the bill had another bonus. The same tax breaks also apply for projects that make use of marginal lands like rooftops, brownfields, and landfills, as well as for “agrivoltaics,” in which land accommodates both solar and agriculture.
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