Solar energy in U. S. becoming more expensive due to shortages
2023.01.31 03:30
Solar energy in U. S. becoming more expensive due to shortages
By Ray Johnson
Budrigannews.com – According to a report that was released late on Monday, project developers have struggled to obtain imported panels, which has caused contract prices for solar energy in the United States to rise by a third over the past year.
However, as a result of significant new federal subsidies, wind energy prices have decreased somewhat in recent months.
According to LevelTen Energy’s quarterly index of renewable energy deals, prices on solar contracts, also known as power purchase agreements (PPAs), were up 8.1 percent and 33.3%, respectively, in the fourth quarter.
President Joe Biden’s landmark climate change legislation, which extended tax credits for renewable energy projects at the end of last year, has had less of an impact on solar developers due to constraints in the supply chain.
The incentives provided by the Inflation Reduction Act have given the American wind industry new life. Prices for wind power purchase agreements (PPAs) decreased by 1.9% in the fourth quarter, marking the first decline since early 2021.
The seizure by U.S. customs officials of hundreds of shipments of solar energy components at U.S. ports since June was the cause of the increase in solar prices. At that time, imports from China’s Xinjiang region were outlawed by a law.
It is assumed by the Uyghur Forced Labor Protection Act that all goods produced in Xinjiang use forced labor. It only allows imports if producers show equipment sourcing documentation that links the raw material to the equipment.
In an interview, LevelTen Senior Director of Developer Services Gia Clark stated:
“Those delays and access to that equipment is introducing significant amounts of uncertainty on timelines, and therefore PPA prices are going up to cover that risk.”
However, Clark added that there was still a significant amount of demand for solar projects and that prices might settle in the second half of 2023.
