Released September 29, 2022 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Analysis of the U.S. solar power sector finds that, while there are still looming challenges in the supply chain, recent legislation should support more contract activity in the near future.
Research from Wood Mackenzie finds that U.S. President Joe Biden's signature Inflation Reduction Act (IRA), which contained key measures supporting renewable energy, is stimulating activity in the U.S. utility-scale solar power sector.
During the second quarter alone, the U.S. market saw 10 gigawatts (GW) of new capacity contracts emerge, a 201% increase from the first quarter and the largest quarter-over-quarter growth rate ever.
"This activity accounted for the largest quarterly contracted capacity since 2019 and brought the contracted pipeline to 88 GW, an all-time high," Wood Mackenzie noted.
In the U.S. market, wind energy is the dominant form of renewable power, accounting for about 9% of total electricity generation. Hydropower is next with 6% of total U.S. electricity generation, and solar generation accounts for about 3% of the total.
Click on the image at right for a graph detailing the recent and projected outlook for the U.S. renewable energy supply, from the U.S. Energy Information Administration (EIA).
It's fossil fuels that provide the most electricity generation in the U.S. market and most of that comes from natural gas, which was the source of 38% of total U.S. electricity generation in 2021.
The extraordinary spike in commodity prices driven by the Russian war on Ukraine, however, may be incentive enough to bring more renewables to the grid. Incentives included in the IRA could bring even more momentum to the sector.
Taxpayers and businesses can take up to 30% in tax credits for the price of the installation of solar energy projects under the measure. Wood Mackenzie estimates that "will be a massive growth catalyst for the solar industry."
Sylvia Leyva Martinez, a senior research analyst with Wood Mackenzie, said utility-scale investments are getting a real boost from recent U.S. legislation.
"We are seeing a lot of optimism right now in renewables with the passage of the Inflation Reduction Act," she said. "There are still some short-term challenges for installations, as we continue to grapple with supply chain challenges, but the future looks very bright."
As such, Wood Mackenzie said it doesn't expect to see the full benefits from the bill until 2025. But even then, the U.S. Energy Department said it expects wind and solar to contribute the most to new electricity generation this year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Research from Wood Mackenzie finds that U.S. President Joe Biden's signature Inflation Reduction Act (IRA), which contained key measures supporting renewable energy, is stimulating activity in the U.S. utility-scale solar power sector.
During the second quarter alone, the U.S. market saw 10 gigawatts (GW) of new capacity contracts emerge, a 201% increase from the first quarter and the largest quarter-over-quarter growth rate ever.
"This activity accounted for the largest quarterly contracted capacity since 2019 and brought the contracted pipeline to 88 GW, an all-time high," Wood Mackenzie noted.
In the U.S. market, wind energy is the dominant form of renewable power, accounting for about 9% of total electricity generation. Hydropower is next with 6% of total U.S. electricity generation, and solar generation accounts for about 3% of the total.
Click on the image at right for a graph detailing the recent and projected outlook for the U.S. renewable energy supply, from the U.S. Energy Information Administration (EIA).It's fossil fuels that provide the most electricity generation in the U.S. market and most of that comes from natural gas, which was the source of 38% of total U.S. electricity generation in 2021.
The extraordinary spike in commodity prices driven by the Russian war on Ukraine, however, may be incentive enough to bring more renewables to the grid. Incentives included in the IRA could bring even more momentum to the sector.
Taxpayers and businesses can take up to 30% in tax credits for the price of the installation of solar energy projects under the measure. Wood Mackenzie estimates that "will be a massive growth catalyst for the solar industry."
Sylvia Leyva Martinez, a senior research analyst with Wood Mackenzie, said utility-scale investments are getting a real boost from recent U.S. legislation.
"We are seeing a lot of optimism right now in renewables with the passage of the Inflation Reduction Act," she said. "There are still some short-term challenges for installations, as we continue to grapple with supply chain challenges, but the future looks very bright."
As such, Wood Mackenzie said it doesn't expect to see the full benefits from the bill until 2025. But even then, the U.S. Energy Department said it expects wind and solar to contribute the most to new electricity generation this year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
