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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The rush to renewables has slowed, but has it plateaued?
Various factors, among them the COVID-19 pandemic, supply-chain problems, lack of skilled workers, tariffs on imported materials and landowner pushback, have combined to dramatically slow the completion of wind and solar energy projects in the U.S., according to Industrial Info Resources' Global Marketing Intelligence (GMI) platform.
"There are various reasons for the slowdown in the completion of renewable energy projects in the U.S.," said Britt Burt, Industrial Info Resources' vice president of research for the global power industry. "Difficulty in obtaining financing, regulatory challenges, or a shortage of available capacity on the transmission grid are three longstanding challenges to getting renewable generation built. The last few years have added a new set of headwinds."
The number of completed wind and solar projects in the U.S. peaked at 240 in 2019 before plummeting to 66 in 2021. Meanwhile, U.S. wind and solar projects that were cancelled or deferred rose from 95 in 2018 to 155 in 2021.
Click on the image at right to see the number of wind and solar projects in the U.S. that were completed, or cancelled or deferred, between 2018 and 2021.
The total investment value (TIV) of completed wind and solar projects in the U.S. peaked at $46.2 billion in 2019, before falling to $33.3 billion in 2020 and $7.5 billion last year. Meanwhile, the dollar-value of renewable energy projects that were cancelled or deferred was triple the value of completed projects last year in 2021.
The reasons for the slowdown in renewable power completions are various:
Within weeks of that February move, many members of the Solar Energy Industries Association (SEIA) said their expected imports of solar modules from those countries have been delayed or cancelled. In an online event April 5, SEIA President and Chief Executive Officer Abigail Ross Hopper said of the investigation's chilling effect, "We're already seeing a rapid degeneration of the U.S. solar industry as panel suppliers stop shipping to the United States." The group surveyed more than 400 of its members, and 78% said their expected module supply has been delayed or cancelled since the anti-dumping investigation began.
Part of the slowdown in renewable energy completions could be because, after a prolonged period of heavy development, many of the best, most economic sites already have been developed. Also, as states attain their renewable portfolio standards (RPS), they may ease off efforts to obtain more renewable energy. A third factor is that cost reductions in renewable energy have slowed. For more on that, see November 6, 2021, article - Lazard Study Shows Flattening of Cost Reductions for Renewable Generation.
This slowdown in renewable energy completions comes as a growing number of utilities have announced plans to exit coal and more aggressively increase the proportion of renewables in their electricity mix. For more on that, see March 22, 2022, article - Race to Renewable Energy Still Going Strong in the Heartland and February 11, 2022, article - Duke Energy Announces Planned Exit from Coal.
This slowdown could be reversed if the warnings from the International Energy Agency (IEA) (Paris, France), the Intergovernmental Panel on Climate Change (IPCC) (Geneva, Switzerland) and other agencies are heeded and the world moves even more aggressively to counter the effects of global climate change by more rapidly decarbonizing their electric power generation, transportation, agriculture and oil and gas production industries.
Investor pressures to decarbonize and implement ESG (environmental, social and governance) measures have helped "green" the power and oil and gas production industries in recent years. If those measures continue to be aligned with higher shareholder returns, that could help boost renewable wind and solar power project activity in the U.S.
"If it is true that the long-term is simply a collection of short terms, it's too early to say that the rush to renewables has entered a long-term decline" said IIR's Burt. "In the last few years, it certainly has slowed down. But the ongoing transformation of the electricity business has taught me to say, 'never say never.' "
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Various factors, among them the COVID-19 pandemic, supply-chain problems, lack of skilled workers, tariffs on imported materials and landowner pushback, have combined to dramatically slow the completion of wind and solar energy projects in the U.S., according to Industrial Info Resources' Global Marketing Intelligence (GMI) platform.
"There are various reasons for the slowdown in the completion of renewable energy projects in the U.S.," said Britt Burt, Industrial Info Resources' vice president of research for the global power industry. "Difficulty in obtaining financing, regulatory challenges, or a shortage of available capacity on the transmission grid are three longstanding challenges to getting renewable generation built. The last few years have added a new set of headwinds."
The number of completed wind and solar projects in the U.S. peaked at 240 in 2019 before plummeting to 66 in 2021. Meanwhile, U.S. wind and solar projects that were cancelled or deferred rose from 95 in 2018 to 155 in 2021.
The total investment value (TIV) of completed wind and solar projects in the U.S. peaked at $46.2 billion in 2019, before falling to $33.3 billion in 2020 and $7.5 billion last year. Meanwhile, the dollar-value of renewable energy projects that were cancelled or deferred was triple the value of completed projects last year in 2021.
The reasons for the slowdown in renewable power completions are various:
- President Donald Trump imposed a Section 201 tariff on Chinese-made solar panels in 2018, a move that the Biden administration extended for four more years this past February.
- Landowner resistance to renewable energy is not new, but CNN this month aired an investigation into how a Midwest conservative group, the Center of the American Experiment, is funding opposition to wind power in favor of preserving traditional fossil-fuel generation resources.
- The follow-on effects of the COVID-19 pandemic, including workplace restrictions, supply-chain disruptions, worker shortages and rapid economic expansion, have affected renewable energy project activity and many sectors of the economy.
- As the U.S. emerged from the pandemic, electricity demand jumped in 2021, but growth is expected to revert to an average of 1% or less in the coming years, meaning electric generators don't need to replace each megawatt of shuttered generation with new generation.
- After years of aggressive renewable power development, at least one state, California, found it had far more renewable generation available during the middle of the day than it needed. The so-called "duck curve" also means less renewable energy is available when it is most needed, during the late-afternoon hours of the summer.
Within weeks of that February move, many members of the Solar Energy Industries Association (SEIA) said their expected imports of solar modules from those countries have been delayed or cancelled. In an online event April 5, SEIA President and Chief Executive Officer Abigail Ross Hopper said of the investigation's chilling effect, "We're already seeing a rapid degeneration of the U.S. solar industry as panel suppliers stop shipping to the United States." The group surveyed more than 400 of its members, and 78% said their expected module supply has been delayed or cancelled since the anti-dumping investigation began.
Part of the slowdown in renewable energy completions could be because, after a prolonged period of heavy development, many of the best, most economic sites already have been developed. Also, as states attain their renewable portfolio standards (RPS), they may ease off efforts to obtain more renewable energy. A third factor is that cost reductions in renewable energy have slowed. For more on that, see November 6, 2021, article - Lazard Study Shows Flattening of Cost Reductions for Renewable Generation.
This slowdown in renewable energy completions comes as a growing number of utilities have announced plans to exit coal and more aggressively increase the proportion of renewables in their electricity mix. For more on that, see March 22, 2022, article - Race to Renewable Energy Still Going Strong in the Heartland and February 11, 2022, article - Duke Energy Announces Planned Exit from Coal.
This slowdown could be reversed if the warnings from the International Energy Agency (IEA) (Paris, France), the Intergovernmental Panel on Climate Change (IPCC) (Geneva, Switzerland) and other agencies are heeded and the world moves even more aggressively to counter the effects of global climate change by more rapidly decarbonizing their electric power generation, transportation, agriculture and oil and gas production industries.
Investor pressures to decarbonize and implement ESG (environmental, social and governance) measures have helped "green" the power and oil and gas production industries in recent years. If those measures continue to be aligned with higher shareholder returns, that could help boost renewable wind and solar power project activity in the U.S.
"If it is true that the long-term is simply a collection of short terms, it's too early to say that the rush to renewables has entered a long-term decline" said IIR's Burt. "In the last few years, it certainly has slowed down. But the ongoing transformation of the electricity business has taught me to say, 'never say never.' "
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
