Over the last year the solar and storage industry has seen significant growth and new opportunities. But, like any revolution, the solar industry faces its own set of challenges and opportunities. Solar and storage are dependent on a vast supply chain of crucial materials to develop grid-critical solar and storage projects. Supply chain issues have become nearly synonymous with the renewables industry. The implementation, threat, pause, and ever-changing landscape of import tariffs have amplified the volatility many renewables developers have been dealing with since before the start of the 2020s. As the demand for solar and storage projects increases, so does the need for quick, affordable, and reliable solutions to build projects. Thankfully, the Inflation Reduction Act is continuing to funnel investment into solar and storage and, eventually, support the manufacturing need in the United States.
As developers wait for manufacturing to catch up to the growing solar demands, they can shift their focus to other areas to keep projects moving. Developers can make certain they understand the potential local, state, and federal roadblocks, which come with their own challenges. They can look at being clean energy stewards and educate the public on their project development and its economic impact. Additionally, looking for unique or cross-industry partnerships will continue to further the clean energy transition. Placing focus on these key pillars will help developers overcome typical roadblocks faced when constructing solar and storage projects. Streamlining efficient development will greatly impact the progress of clean energy today for a more energy-resilient country.
There is broad agreement amongst renewable developers that increasing domestic manufacturing would be beneficial for the clean energy industry, as well as the U.S. labor market as a whole. Progress is being made and domestic manufacturing build-outs are well underway. For instance, since the passage of the Inflation Reduction Act (IRA) over 80 manufacturing facilities have been announced, bringing almost 30,000 jobs.
However, overhauling the manufacturing capabilities of the U.S. will take time, collaboration, and investment – we are expecting 358 gigawatts of new solar capacity to be installed in the US between 2023 and 2030 but are working our way up to hopefully 42 gigawatts of US-produced panels annually, starting in 2027, which is a substantial gap. While manufacturing in the U.S. is progressing, developers today are working through the lengthy wait times and high pricing associated with importing key equipment from abroad. While panel pricing has declined towards pre-2021 prices, the delays associated with switchgear and high-voltage equipment are limiting the ability to put renewable projects in the ground. This is forcing developers to think more creatively about how to make projects pencil in a high construction cost and interest rate environment. Stepping outside the normal development strategy is causing a new developer mentality as they sort through rules, incentives, grants, and tax breaks to get projects built.
In a tight margin environment, it is especially important for developers to partner with local communities to avoid unnecessary battles and costs. This is especially the case for community solar and storage projects, which are just as important as C&I or utility-scale projects in transitioning the U.S. to a cleaner energy-sourced future. As developers are building multiple solar and storage projects at the same time, even across multiple states, the connection to the community can become lost.
Incorporating community education about the strategy, process, and progress can help lessen the friction a new development can cause. Simply put, people are wary of change. But taking the time to educate the local community about the environmental and economic benefits of a project can help foster a sense of environmental stewardship and encourages support for renewable energy initiatives. Additionally, these projects bring a significant economic component to the community in the form of jobs and resilient and affordable energy. Incorporating an education component can help developers garner local support, foster environmental stewardship, create economic opportunities, and enhance affordable energy resilience.
When developers think of strategy it’s usually about the logistics of laying down panels or getting the project physically built. Developers need to consider how to create a multi-purpose structure, along with what to do with depreciated solar and storage components. With the right partner, it is all possible. As the U.S. races to achieve 80% renewable energy generation by 2030, developers need to start thinking creatively.
Developers are in a position to make multi-purpose partnerships in order to achieve business targets. For example, by partnering with the agriculture industry developers can integrate agrivoltaics technologies to propel clean energy forward and support soil health. Or using pollinator-friendly seed mixes to support local bee populations and farmers. Another example is looking at the lifecycle of solar panels and how to responsibly handle their decommissioning. Sustainability efforts don’t stop once a project is completed, developers actively need to incorporate how to reuse or recycle components from projects. It’s not always about creating but also about preservation and restoration. A creative and holistic strategy will set a developer apart in this industry and attract the right capital partner(s) to invest for the long term.
The United States is at an acceleration point for the clean energy transition. Since the IRA, the industry has been attracting more investment and market interest putting developers in a unique position. These policies have provided financial incentives and stability for renewable energy projects, attracting investment and stimulating market demand. The IRA has created a favorable environment for the development of clean energy technologies, resulting in increased capacity and cost reductions, ultimately driving the growth of the clean energy industry. As stability and investment flow into solar and storage, a developer has the resources to understand policy, community, and partnerships to avoid typical roadblocks. It is up to developers to make the right decisions for their business and sustainability strategy to continue to advance clean energy.