The US solar industry has recorded its lowest quarter of installations since the start of the coronavirus pandemic, according to the US Solar Market Insight report.
The report, released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, revealed that in the first quarter of 2022, price increases and supply chain constraints continued to suppress the solar market as the industry installed 24% less solar capacity than the first quarter in 2021.
The utility-scale solar market saw the sharpest decline in the first quarter and experienced its lowest quarter of installations since 2019 and the lowest number of new projects added to the pipeline since 2017.
The White House’s executive action this week to provide a two-year suspension of any new solar tariffs gives businesses certainty to accelerate projects delayed by the Department of Commerce’s anti-circumvention investigation, SEIA said.
It added that without this action, “massive project delays and cancellations” would have continued throughout 2022, putting President Biden’s climate goals at risk.
Since the case was initiated in March, most solar module manufacturers have halted shipments to the United States, causing an industry-wide module shortage.
These supply constraints are expected to ease as manufacturers ramp up shipments to the US in the coming months.
“The solar industry is facing multiple challenges that are slowing America’s clean energy progress, but this week’s action from the Biden administration provides a jolt of certainty businesses need to keep projects moving and create jobs,” said SEIA president and CEO Abigail Ross Hopper.
Hopper added: “President Biden has clearly taken notice of how drags on the industry are hampering grid resiliency.
“By acting decisively, this administration is breathing new life into the clean energy sector, while positioning the US to be a global solar manufacturing leader.”
Over the last nine months, 2022 forecasts have been cut in half due to continued supply chain challenges and the anti-circumvention inquiry.
The announcement by the US Government is expected to create approximately 2-3GW of upside potential to Wood Mackenzie’s 2022 base case outlook, assuming the global market resumes normal operations.