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How Do Solar Investment Tax Credit Adders Work?

Posted on August 24, 2023August 24, 2023 by Mike Zimm

When it comes to the government, there’s no such thing as a simple, straightforward solution.

Unfortunately, for developers, financiers, and engineering, procurement, and construction companies, known as EPCs, that means knowing when, how, and where projects qualify for federal solar tax credits. Without them, it’s harder to complete jobs quickly and effectively.

When the Inflation Reduction Act of 2022 was signed into law, it opened the door for a massive uptick in tax credits for solar. However, not everyone qualifies for all the tax credits, and plenty of intricate rules must be followed to receive them.

Projects can qualify for ITC solar credits up to 60%, with adders tied to domestic materials and products, location, and low-income communities.

But what projects qualify for federal funding?

What is the Base ITC Credit?

When the Inflation Reduction Act was signed into law, it extended the shelf life of the Investment Tax Credit (ITC) for solar installations and increased its value.

From now until 2032, solar credits for projects are 30% and apply to businesses and homeowners. After 2032, the credit decreases until it’s finally sunset. For utility-scale solar projects larger than 1MW, the tax credit is 6% but rises to 30% if several criteria are met.

But what are the criteria, you ask?

For starters, a project qualifies for the 30% credit if workers are paid prevailing wages. The project also requires a certain number of apprentices to perform the work. There are also rules for apprentice-to-journeyman worker ratios, as outlined by the Department of Labor.

Accessing the 10% ITC Adder

Qualifying for the 10% domestic production adder requires projects to satisfy three criteria:

Must be in the United States or an associated territory
Must use new or like new equipment (cannot exceed a certain threshold of used parts)
Cannot be leased to a tax-except entity

The first 10% Investment Tax Credit available is the domestic content adder. As the name implies, projects must use a certain percentage of U.S.-produced materials to qualify. In the case of steel and iron, 100% of those materials must be U.S.-made as outlined by American Iron and Steel (AIS) rules, meaning everything from sourcing to final finishing has to take place in the United States.

With that said, the domestic content adder does not apply to subcomponents used for the project, including nuts, bolts, washers, etc.

Meeting the Project Threshold

As with any federal funding project, businesses must meet certain criteria before accessing the federal tax credit.

For the 10% ITC adder, manufactured products must comprise at least 40% of the total project cost. Over time, the threshold will rise, meaning more domestic products are needed to receive funding.

Offshore wind projects will follow a similar rising threshold schedule, but only 20% of the total cost-adjusted percentage needs to be tied to U.S. manufactured products for now.

The percentages increase over time, as seen in the table below.

Year	Domestic Product Threshold – Solar	Domestic Product Threshold – Offshore Wind
Before 2025	40%	20%
2025	45%	27.5%
2026	50%	35%
2027	55%	45%

The threshold for offshore wind will eventually reach 55% after 2027 to match solar projects.

Of course, the rules aren’t as black-and-white as one would hope, and there are breakdowns for how products are classified as domestic or foreign-made.

For example, only components mined or made in the U.S. count toward the total adjusted content rule. Let’s say you’re using a widget made with three components – two are domestically made, but the third was manufactured overseas. Although the widget was U.S.-made, you only get credit for the two domestically produced components.

The cost of the foreign-made component would be subtracted from the total cost of the widget, leaving you with the cost of the U.S.-made parts. Whatever that percentage is counts toward the total cost.

It’s a lot to manage, but the rule is simple: If a component, product, or material is made in the U.S., it counts! But besides the domestic manufacturing component associated with the adder, projects also need to meet one of several conditions, including:

The project has an installed capacity of less than 1MW AC
Construction began before Jan. 29, 2023
It meets prevailing wage and apprenticeship requirements

Projects meeting one of these conditions are eligible for the 10% credit.

Concerns About the Threshold

One common concern from solar EPCs is the difficulty of hitting the domestic product threshold due to a lack of U.S.-based manufacturers for solar products.

Solar companies have had trouble getting ahold of critical solar power system parts, including solar panels, inverters, BOS components, and racking materials. As the threshold rises, some installers fear the 10% ITC will be too difficult to reach.

In 2022, the government issued a moratorium on solar tariffs, opening the door for cheaper panels and parts from Asian countries. Though it brings an influx of cheap parts to help installers catch up on delayed projects, they also jeopardize the chances of their solar energy system receiving the renewable energy tax credit.

Ramping Up Domestic Production

The moratorium was offered, in part, to keep solar projects moving while domestic manufacturers got up to speed.

While increased federal support is a boon for companies trying to take market share from foreign competitors, the investment is a long-term strategy that leaves current problems unsolved.

First Solar is the major solar panel producer in the U.S., but the company does not have the size to meet current demand. Other solar manufacturers include, but are not limited to, Heliene, Mission Solar, JinkoSolar, SunPower, Silfab Solar, and Hanwha Qcells, which all produce different parts of the BOS, but have also struggled to meet U.S. demand in recent years.

However, several brands, including Qcells, have announced expansion plans in the coming years to support increased demand. For example, Qcells’ expansion in Georgia will add 2,500 jobs and double production at the facility by 2024.

Other Available Solar Project Credits

It might seem too good to be true, but the 30% ITC credit can rise as high as 60% in certain situations.

Energy Community Bonus

Solar projects can earn an additional 10% credit for building in a former energy community. What’s an energy community? It’s a location that is either a former brownfield site or a facility where coal, oil, or natural gas are mined or converted into energy.

If the site isn’t a brownfield, the project could still qualify if it satisfies one of several other criteria, including:

Either .17% direct employment OR at least 25% of local tax revenue from coal, oil, or natural gas production or storage AND an unemployment rate higher than the national average
Housed a coal mine that closed after 1999 OR a coal electric plant retired after 2009

Although many parts of the country qualify under at least one of these conditions, some sections don’t, including much of the Midwest.

Keep in mind that energy communities should NOT be confused with low-income areas.

Low-Income Bonus

This 10% credit is awarded to solar projects that sell electricity to lower-income areas and is for solar installations smaller than 5MW.

What’s interesting about this clean energy adder is that it has two tiers. Projects receive a 10% ITC if they’re located in a low-income community or on Native American land. If the installation is a qualified low-income residential building project, which, according to the Office of Energy Efficiency and Renewable Energy, requires “financial benefits of the solar facility must be allocated equitably between the residents,” it receives a 20% ITC.

The Credits Are Complicated, But They Have to Be

When the government gets involved, it typically comes with heaps of regulatory red tape, but the complexity of this program is vital for a few reasons.

Tying an ITC or PTC to the program encourages solar companies to buy American-made products, bolstering the economy and decreasing reliance on foreign-made goods like solar panels, racking, and PV wire.

Programs like this also help with nearshoring and reshoring manufacturing efforts. When domestic goods are prioritized, installers benefit from lower shipping costs, including tariffs and duties, since the material has a shorter shipping distance.

With higher demand, companies can hire and support additional jobs in emerging industries. These careers often pay well and offer room for advancement, making it possible to make a living in a burgeoning market. It’s also important to consider where the jobs are going. Establishing companies and projects in economically depressed areas and locations where fossil fuel plants once stood keeps jobs in those communities and even adds new ones.

Credits Keep Solar Moving

The U.S. is moving toward a sustainable future, but can solar tax credits work?

Solar is surging in the United States, not just because it produces low-cost energy for communities alongside hundreds of thousands of jobs. Installations can stabilize the electrical grid using new technology, keeping the lights on in homes. As the technology improves, solar could be a low-cost alternative to fossil fuels, reliably producing clean, renewable energy.

Renewable energy still has a long way to go to become the primary power source for the U.S., but a monumental shift is possible with a clear focus on solutions.

Factory vs. Field-Made: Comparing Solar Connectors

Posted on July 14, 2023 by Mike Zimm

Utility-scale solar installations have a lot of fragile parts and pieces. Small issues can result in thousands of dollars’ worth of lost energy, system damage, or even a fire.

According to HelioVolta’s SolarGrade PV Health Report, nearly 60% of solar installation issues were attributed to field-made connectors or wire management. Field-made connector issues alone attributed to one-third of all problems at solar sites. Within that segment, the percentage of critical and major issues attributed to field-made connectors was higher than any other damage type.

It’s fair to say connectors are a concern, but it helps to know when and how the connectors were made. Field-made connectors are installed on-site by workers, compared to factory-made ones attached to PV wire during production.

With that in mind, the blame then falls on either the connector or the worker who assembled it.

With so much money and energy on the line, companies must reduce liability and increase their installations’ reliability. Could factory-made connectors improve overall production and dependability?

The Difference Between Field and Factory-Made Solar Connectors

Companies have two options for connectors for a utility-scale solar power array: factory-made connectors or field-made solar connectors.

Factory-made connectors are installed onto the wire in a controlled environment. Performing the work in a manufacturing facility makes it easier to spot quality assurance (QA) and quality control (QC) issues so bad connectors aren’t sent out to the field.

When PV wire connectors are made in the field, they’re assembled by solar installers. Typically, field-made connectors are used to ensure connectors aren’t cross-mated with other “compatible” parts. During this process, workers use certified pieces and tools supplied by a manufacturer and then do the work themselves. The important thing to remember here is that both the parts and the tools are certified, meaning installers should only use what was supplied to them by the manufacturer.

Although several connector types exist on the market, some are more common than others. MC4 connectors, using a plug-and-socket method, are the current standard, and Swiss manufacturer Staubli is the original developer and manufacturer. Since the MC4’s inception, many other companies have started making their own compatible connectors, leading to a growing number of connector manufacturers and parts to choose from.

The problem is although there is a certification process for the connectors, cross-mated parts aren’t usually tested together as a single unit.

One Size Doesn’t Fit All

There are several types of connectors used in solar operations, including the MC4, MC3 (phased out by MC4), and Amphenol Helios models, but you can’t always use one with another.

While it might not seem like a big deal mixing and matching connectors across a solar site, HelioVolta noted in its SolarGrade report that pieces were either improperly installed or cross-mated in nearly 80% of field-made connector issues.

As installers rush to catch up with delayed projects and set up new sites, the resulting time crunch opens the door for mistakes. The industry is also growing, leading to an influx of junior installers who may not have enough experience to perform the job well.

What Does This Mean for Solar Sites?

Connector issues set the stage for several problems. From water and moisture exposure, bad PV connector points, and damaged wires from bad crimps or other mistakes, every issue could open the door to a costly disaster.

So, what happens when a PV system has connector issues? Quite a lot, actually:

Lost power and outages – When connectors fail, the solar panel is no longer reliably connected to the Balance of System (BOS). When that happens, the system produces less energy.
Ground faults or arcing – Ground faults and arcs occur when there isn’t good contact in the connector. Heat expands the parts over time, opening gaps and eventually creating an arc that can damage surrounding wires and materials.
Fires – When fires break out, they can quickly cause millions of dollars in damage. Once the fire is out, crews need to replace damaged and charred parts, adding sunk time and labor costs to the total bill.

Not every field-made connector is an inherent fire risk, but they may carry more risk than factory-made parts, according to HelioVolta’s data.

Avoiding Connector Issues

Limiting the number of fail points is critical when dealing with large utility-scale installations.

Buying factory-made connectors addresses a crucial failure point, setting your solar energy project up for better long-term success.

According to the SolarGrade PV Health Report, only 6% of issues at solar arrays were tied to factory-made connectors, much less than the 33% associated with their field-made counterparts. Manufacturer-made parts also reduce on-site critical and major problems, thanks to each manufacturer’s rigorous QC and QA programs.

The Best Connector for the Wire

Another benefit of factory-made connectors is that manufacturers can use compatible products with their wire and cable. The result is a more reliable connection, thanks to a standardized process retaining integrity across the board.

Installers may rush or get stretched thin, limiting their attention, resulting in potentially loose or poor connections. Furthermore, unlike field-made connectors that may lack QA assurance from another worker in the field, most manufacturers have staff on hand to spot potential concerns before the wire leaves the factory.

What Do Bad Connectors Look Like?

No matter what type of connector is used, you should know what damage looks like.

We recommend having crews inspect solar sites once every 6 months or so and check every connection point for common problems, including:

Gaps
Cross-threading
Sun Damage
Overheating
Other connector or wire damage

One of the easiest mistakes to make is using incompatible connectors. When connectors are cross-mated without checking for compatibility, it can put the solar installation at risk. Mismatched connections can generate a lot of heat, making them easy to spot with a temperature gauge.

It’s also important to ensure every installer is trained to properly work on solar panels, cabling and other balance of system (BOS) pieces.

Know What You’re Getting

Simply put – buying factory-made connectors reduces risk.

Manufacturers have strict quality control standards to prevent damaged or improperly assembled connectors from being shipped out to the field in the first place. If bad parts do get shipped, they can also work alongside customers to quickly correct mistakes before dangerous situations develop.

Not all field-made connectors will have issues, and many will be fine. But when the goal is to limit risk and liability on your renewable energy project, factory-made connectors are the way to go.

Is Corporate America Leading Solar Adoption?

Posted on May 8, 2023May 8, 2023 by Mike Zimm

Utility-scale solar adoption is rising in the United States, but do we have some of our favorite brands to thank?

The U.S. Energy Information Administration (EIA) says more than 29 gigawatts (GW) of solar energy could be installed this year, comprising more than half of new energy coming online. According to the organization, the projected 29.1 GW would be more than double the next highest installation year in 2021.

Solar has been part of the ongoing renewable energy industry renaissance for over a decade. It’s not showing signs of slowing down, either – even with supply chain hiccups in 2022.

So, what’s causing so much change in the solar market, and why are people bullish on the future of solar power? It comes down to a few stars aligning at the right time, including policy changes, new funding and support, and better, more consistent supply.

It also helps that America’s largest and most influential brands are stepping up to add solar to their portfolios.

Utility-Scale Solar Moves Beyond Energy Producers

When you think about utility-scale solar, utilities are the first thing that comes to mind.

Although utilities are still the largest solar energy producers, corporations across the U.S. are testing the waters. Increasingly, these companies have aggressive renewable energy and carbon neutrality goals, making their investments a no-brainer.

Meta (which owns Facebook, Instagram, and WhatsApp) is leading the way with nearly 3,600 MW (3.6 GW) of solar power installed as of June 2022. Other corporate giants like Amazon, Microsoft, Target, Cargill, and Kaiser Permanente are following suit, investing in solar projects across the United States. In fact, 18 of the top 25 companies on the SEIA’s 2022 Solar Means Business report have 100% renewable energy or carbon-neutral goals.

Though the attention often goes to huge companies, the truth is hundreds of organizations are investing in utility-scale solar. Through June 2022, about 19 GW of solar can be attributed to corporate solar investments, and 27 GW more is expected to come online by 2025.

Why Are Companies Choosing to Go Solar?

Billion-dollar organizations aren’t usually known for their kindness, but investing in solar installations carries several benefits.

Not only do they generate electricity that can be used by the company to offset electricity costs, but the projects also open the door for more clean energy initiatives to offset greenhouse gas emissions.

Sustainability

According to the SEIA, nearly one-fourth of large-scale solar projects had at least one commercial buyer.

We know solar energy is one way of reducing our carbon footprint while distancing ourselves from fossil fuels. Reducing carbon dioxide emissions impacts greenhouse gases, which radiate heat in our atmosphere. Greenhouse gases are partially to blame for rising temperatures causing environmental concerns, including ocean acidification.

The good news is corporate solar installations are making a difference. According to the SEIA’s reporting, the amount of CO2 reduced is equal to removing 4.4 million cars from the road.

It’s Tax-Friendly

When the Inflation Reduction Act was signed into law in August 2022, it opened the door for homeowners, companies, and others to invest in solar energy.

Not every company is Meta, Walmart, or Amazon, but they can still take advantage of IRA tax incentive programs. These include the Investment Tax Credit (ITC) and the Production Tax Credit (PTC), which cover installation costs and electricity generation, respectively.

The Investment Tax Credit is upfront and reduces federal income tax liability for installation costs, depending on the system’s cost. The Production Tax Credit is determined by the amount of electricity generated. It reduces federal income tax liability based on how many kWh are produced during the system’s first 10 years.

Depending on the size of the installation and how much power is generated, sometimes the ITC is the better tax credit to choose. However, if the system produces a lot of electricity, the PTC is more beneficial.

There are several eligibility requirements tied to the incentives, but navigating them successfully usually produces long-term savings.

Low-Cost Electricity

No one can resist a bargain, including your friendly neighborhood conglomerate.

Renewable energy is one of the cheapest forms of energy out there, undercutting fossil fuels across the board. One reason for the low cost is the massive drop in solar project costs over the last decade. According to the World Economic Forum, solar prices have fallen roughly 85% in the last decade, positioning more companies than ever to take advantage of emerging technologies.

Solar isn’t the only renewable energy worth considering. Most renewables coming online today, including wind energy, produce electricity more cheaply than traditional fossil fuels like natural gas or coal.

Positive Long-Term ROIs

Establishing a solar farm is still expensive, but government tax incentives and generating low-cost electricity for decades lessen the sting.

Solar energy electrical costs are between .03 and .06 per kilowatt hour (kWh). Fossil fuels come in slightly higher, at .05 to .17 per kWh. Kilowatt-hours measure electricity usage based on a 1,000-watt appliance.

When stretched out across the typical lifespan of 25-30 years with little maintenance, it’s understandable why more companies are investing in panels. Panel warranties also usually last 25 years, making them a low-risk investment for companies with aspirational emission reduction and energy goals.

Renewables Become Commonplace

Establishing massive solar farms was once too expensive for everyone but the largest companies.

Today… not so much.

Building a solar array is still expensive, but the cost of entry is falling, allowing more companies to participate. Meanwhile, installations are more reliable and last longer, improving ROI across their lifespan.

This isn’t to say solar energy, wind power, geothermal energy, and other renewables will take over tomorrow. All renewables, including solar, must keep improving to increase efficiency and live up to the world’s ambitious climate change goals.

Corporate America, including some of the world’s most influential brands, is helping lead the charge. Of the top 25 companies featured on SEIA’s Solar Means Business report, 16 are on the Fortune 500.

It’s an exciting time to work in the renewable space. Solar technology is rapidly improving, and new innovations are on the horizon. Companies jumping on the trend today could potentially position themselves for massive future returns.

Production, Labor, and Land: The Push for Solar Energy

Posted on April 5, 2023April 9, 2024 by Mike Zimm

You’ve probably seen renewable energy, including solar, receiving large-scale investments lately.

It’s no surprise the solar industry is growing, especially given the world’s push to curb climate change. The U.S. solar market currently totals $35 billion and generates about 5% of our country’s electricity – nearly 11 times more than a decade ago. The trend is expected to continue, thanks to recent actions from the Biden administration, including the recently passed Inflation Reduction Act (IRA).

The government’s actions are spurring excitement in the industry. Solar manufacturers are announcing large-scale production investments, including Qcells, Enel, Maxeon, and CubicPV. These projects are expected to increase domestic solar production more than five times, expanding from 7GW to more than 42GW.

Though the IRA encourages companies to invest in renewable energy, the changing geopolitical climate plays a vital role. In 2022, a 24-month tariff moratorium was announced for solar panels coming into the U.S. from four Asian countries, including Cambodia, Malaysia, Thailand and Vietnam. The stay allows U.S. companies to import low-cost solar panels from Asia while giving domestic manufacturers time to increase production.

The utility-scale solar growth has been nice, but there are still barriers to success, including:

Reliance on imports
Permitting and regulatory red tape
Ongoing labor issues
Public skepticism of solar power

Combatting these issues may supercharge the clean energy industry and allow for more utility-scale solar power domestically.

Fewer Imports, Better Results

China is a key player in the solar energy industry. Not only does it produce a large number of low-cost solar panels, but it’s also a leader in energy storage.

Although China’s solar panels are inexpensive, they come at a cost. There are questions about the country’s skirting of duties applied to them, and their low cost has made it difficult for domestic manufacturers to compete.

COVID also showed us that supply chains can be easily disrupted, making getting supplies quickly or reliably harder.

Recent developments like the IRA may reduce U.S. reliance on other countries. Contrary to what that sounds like, it doesn’t mean the U.S. is cutting China or any other country out. We’re simply narrowing the supply chain and bringing more production stateside.

Since the IRA became law, innovative companies have jumped in to support solar expansion, committing to producing everything from modules and inverters to batteries, copper foil, and photovoltaic (PV) wire. Even structural products like racking and trackers are showing signs of increased production as manufacturers take advantage of the changing business climate.

Unfortunately, we can’t flip a switch and immediately start production. It can take months, even years, for production facilities to come online. However, the hope is that with enough lead time to get production moving, the U.S. can become competitive in the solar space.

Streamlining the Permitting Process

Let’s be honest; the government is a lot of things, but fast isn’t usually one of them. Despite the Biden administration helping installers get low-cost panels and freeing up billions of dollars to promote renewables, there’s more to do.

The permitting process is different depending on where the installers are. Even the Environmental Protection Agency (EPA) has called the permitting process a “patchwork” of regulations varying from state to state.

To make the process smoother, the EPA introduced a toolkit to help developers, utilities, and communities navigate regulations, secure financing, and troubleshoot issues. But organizations like the SEIA are calling for more permit reform. In their eyes, reducing red tape adds jet fuel to a burgeoning industry, opening the door for more jobs, revenue, and opportunity.

Although there have been attempts to streamline the building process for companies to set up distributed energy systems, none have succeeded. For example, the bipartisan American Energy Opportunity Act of 2019 bill called on the Department of Energy (DOE) to designate a board to help qualify communities with solar systems and certify installers in the space. It died without a vote or any other action.

Establishing Better Career Promotion and Labor Relations

As with any growing industry, thousands of skilled and unskilled jobs are available. The problem is finding enough people to meet increasing needs.

Unskilled labor is in high demand, but so is the need for electrical, process, and chemical engineers, scientists, architects, physicists, planners, and more. The jobs are certainly available, more so with the increased focus.

More than 250,000 people work in the solar industry, with job growth in 47 of 50 U.S. states. Among them, California, Texas, New York, and Florida are at the forefront of hiring and employment. Even states traditionally tied to fossil fuels are beginning to lean into solar.

The labor shortage doesn’t have to cripple solar. If private companies, utilities, colleges, and governments collaborate, it simplifies recruiting efforts and builds industry interest early on. Training programs, apprenticeships, and veterans programs are only a few ways to introduce new workers to renewable energy occupations.

Creating Positive Perceptions

For some people, solar is the future of electrical energy and a way to rely less on fossil fuels. Others see PV panels as another way to muck up a hillside view.

Solar has plenty going for it, but it also has its fair share of detractors. Often helmed by rural mobilization efforts, arguments range from deforestation fears and aesthetic issues for homeowners to agricultural concerns. The truth is that solar installations aren’t nearly the nuisance people think they are.

Think about the last time you looked at a swamp and thought, “Wow, what a great place to build!” Solar sites aren’t typically found where other development is attractive or possible.

Swamps, steep hillsides, and farmland are great locations for utility-scale solar installations because they don’t interfere much with our daily lives. For example, one Sun-Pull solar installation is tucked in behind a correctional facility. Another is in what used to be an unused swamp area off a busy road.

In the case of farmland, agrivoltaics is literally changing the solar landscape. Recent studies have shown that combining solar panels with grazing areas or cropland can benefit both the land and the panels. Unlike other solar installations, which only serve one application, agrivoltaics let property owners use the land while leasing it out.

What’s important to remember is that education breeds awareness, especially in communities where solar is a practical solution. Better access to tools and information can alleviate concerns and encourage residents to learn more about community and utility-scale solar.

Solar Goes Mainstream

This is an exciting time to be in the solar industry, but there’s still more to do.

The industry needs continued investment from private and public sources. An influx of money will spur production, job growth, and energy reliability as the world turns more toward renewables.

Solar manufacturing and installation jobs pay well, have job security, and can help revolutionize the electrical utility industry. More workers also push innovation, better designs, and increased interest in revamping the electrical grid.

Solar power is the future of energy. As installed capacities increase and technology improves, getting much of our energy from the sun, wind, and water will become commonplace. But it’s not all about getting away from fossil fuels; this is a move toward unlimited sustainable, clean energy.

The renewable revolution is here. With a sustained effort, the U.S. is more than capable of reaching its lofty energy production goals.

Is the U.S. Ready for 100% Renewable Energy?

Posted on October 12, 2022October 12, 2022 by Mike Zimm

Renewable energy has grown by leaps and bounds in recent years. But is the U.S. fully prepared to move forward with a 100% clean energy program?

In 2021, renewable energy produced about 20% of all utility-scale electricity in the U.S., but only about 2.8% (115B kWh) was supplied by utility-scale solar energy operations, not including the additional 49B kWh generated by smaller-scale solar operations. The number may seem small, but it’s been growing annually and gives people hope that a fully green grid may be possible.

Two things are clear if you’ve followed the news over the past several years. Fossil fuels won’t be the answer forever, and renewables still have a couple hurdles to jump to pick up the slack.

The U.S. has some pretty ambitious energy goals, and the Biden administration has hinted that it would like to take steps to move away from traditional fossil fuels. This includes an ambitious proposed plan to reach 100% clean electricity by 2035.

Though some experts believe it’s possible to hit the goal in short order, more than 60% of our energy is dependent on fossil fuels. It will take more effort, investment, and support to achieve.

Is the U.S. Ready to Take the Next Step?

At first glance, it might sound like a loaded question – but the answer may be yes.

Several high-level studies, including one by Stanford in 2015, believe the United States can ultimately run on renewable energy… just not by 2035. They peg the year at a more realistic and gradual 2050. Though the study has been questioned, inspiration can be taken from it and its methodology.

This isn’t to say progress isn’t being made in certain states and regions toward a fully renewable future. Rhode Island recently signed legislation into law committing to 100% renewable energy by 2033. The move puts the tiny state at the forefront of the renewable revolution, and it could be the first in the nation to go fully renewable.

Earlier this year, California also made headlines when the state was powered only by renewable energy. The conditions were perfect, allowing California to produce more energy than it needed using only renewable power.

The Golden State has proven that renewable, carbon-free, and sustainable energy sources can replace traditional power generation methods like coal and natural gas. In 2019, about two-thirds of the state’s power came from renewable energy systems like wind, solar, hydro, and nuclear. According to one energy manager with the Union of Concerned Scientists (UCS), investing heavily in solar and wind technologies will get us the bulk of the way, up to 90 percent, toward our clean energy goals.

Why It’s So Hard to Quit Fossil Fuels

If renewables are the future and everyone is scrambling to become the first to be rid of fossil fuels, how come we can’t seem to make it happen more quickly?

The problem is that despite all of the pollution and the trouble we go through to use fossil fuels, they’re energy-dense and efficient forms of energy production. This means they produce energy at a higher rate than other forms of energy, including wood and biomass.

Although oil isn’t typically used for electricity production, natural gas and coal are high-energy generators. They can pick up the slack on days the wind doesn’t blow and clouds block the sun’s rays from hitting solar panels.

Even on that record-breaking day when California produced all of its electrical needs using renewable energy, fossil fuels were working behind the scenes. Fossil fuel power plants take hours to come online, so it’s easier to keep them running than risk not having enough power during peak use hours.

How Do We Make the Move to 100% Renewable Energy?

The easiest way to increase the adoption of renewable energy is to continue investing in it.

This means investing in more green technology, including increasingly efficient solar panels, better wind turbines, and innovative batteries that can store generated electricity for longer. Part of the equation to reach a fully renewable future involves “overbuilding” the electrical grid, meaning we build enough infrastructure to supply more energy than we need.

Some projections spot the number at about 2.5 times the total energy demand to ensure we cover all the bases. That growth means utilities and companies must invest in solar and wind energy, requiring more workers, materials, and space to build.

Another issue we’ll have to tackle soon is energy storage. Wind and solar are variable energy producers, meaning the amount of electricity they produce relies on several factors. On perfect days, harnessing all the excess energy produced and effectively storing it can go a long way toward a clean energy grid.

Recently, researchers in Finland have created a device that allows low-grade sand to store heat energy for months. The heat energy is used to warm homes and even a local swimming pool. The storage system isn’t as efficient when turning heat into electricity, but could potentially be improved to meet rising energy demand with low-cost solutions.

Ensuring Workforce is Ready

Amid a labor shortage, companies across many industries find it tough to attract enough workers to keep operations running smoothly. Electricians, in particular, are in high demand, making it even tougher to attract and retain talent.

Sun-Pull Wire is one of many companies on the edge of innovation, developing products like bundled wire systems that can be installed quickly and save up to 80% of the installation time of string PV, helping with labor shortages and enabling DC installers to take on more projects.

The Government Needs to Step Up

If the U.S. wants to rely on renewable energy sources to power the country, support has to come from the top.

The Biden administration took a big step forward by suspending solar tariffs for two years against four Asian countries, including Cambodia, Thailand, Vietnam, and Malaysia. In another encouraging step, the government recently lifted solar tariffs on goods coming in from Canada, a move made in 2018.

Without the tariffs, utilities can import solar panels and other components at a lower price and reduce the number of delays and cancellations. Fewer tariffs also allow the installed solar capacity to continue growing at a healthier rate.

Unfortunately, tariff concerns did have an impact on the market. The Solar Energy Industries Association (SEIA) reported in its Q2 2022 insights that about 18 GWdc worth of projects were put on hold for at least a year. Another 450 MW was outright canceled.

Reduced tariffs aren’t all rainbows and butterflies, though. U.S. solar manufacturers may find it harder to compete against low-cost imports, claiming it as a disadvantage. On the other hand, utilities and other companies gain access to affordable panels, spurring the country toward its renewable energy goals.

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Our knowledgeable team of solar experts is ready to answer your questions and get the right products into your hand as fast as possible with the shortest lead times in the industry. The Sun-Pull team is ready to support you from start to finish, including blueprint analysis, product help, and decades of solar experience.

Rhode Island Sets Stage for 100% Renewable Energy

Posted on October 4, 2022 by Mike Zimm

Rhode Island may be the smallest state in the nation, but it is making a big splash regarding the future of green energy in the United States.

On June 29, 2022, Governor Dan McKee signed legislation that puts the Ocean State on pace to be the first in the U.S. to reach 100% renewable energy. The law requires that by 2033, 100% of the state’s electricity be offset by renewable energy. Although the law doesn’t prevent using fossil fuels for energy production or use, they will be offset by clean energy sources like wind, solar, and geothermal.

According to Gov. McKee’s office, the new law is expected to create thousands of new jobs while cutting the cost of renewable energy across the state.

“We’ve seen a 74% increase in green jobs since 2014, and that trend is going to continue as we deepen our commitment to renewables,” State Rep. Deborah Ruggiero said in a statement. Ruggiero anticipates thousands of new jobs to come online to support renewable energy sources that will come online over the next several years.

Blueprint for Success: Incremental Increases to Reach Renewable Goals

If Rhode Island wants to be the first to reach 100% renewable energy, it needs to invest in emerging forms of electricity production. This will likely mean leaning more into geothermal energy, wind energy, and developing solar energy systems that take efficiency to another level.

One way to encourage more renewable energy is by turbocharging green initiatives. Under previous state laws on the books, the state was annually increasing the percentage of renewable energy generated by 1.5 percentage points. Under the newly signed law, the number picks up speed each year until reaching a 100% Renewable Energy Standard in 2033.

According to the law, the Renewable Energy Standard percentage will increase by 4% in 2023, jumping by one percent annually through 2026. The increases then become smaller, staying flat in 2027 and then rising by a half percent each year through 2032.

So, how does the new law work? Each year, utilities must buy renewable energy certificates for a certain percentage of power sold annually. These certificates help offset the amount of energy produced and sold by traditional fossil fuels in the state. Besides the certificates, the law also leans on renewable energy producers to up their production using everything from solar energy technologies and offshore wind to hydroelectric facilities and other sources.

What Does Energy Look Like in Rhode Island Today?

It might seem like a lofty goal for any state, but Rhode Island has an opportunity to make some waves.

U.S. Energy Information Administration (EIA) data suggests Rhode Island uses the least energy per capita in the U.S. The state also produces about 90% of its current electric supply using natural gas, the highest percentage in the nation. Only about 12% of the state’s energy came from renewables, with half coming from solar panels.

While it’s encouraging to see such an aggressive clean energy law on the books, there is certainly work to be done. In March 2022, for example, Rhode Island’s renewable energy production reached about 79k MWh, a far cry from the 478k MWh produced by its natural gas-fired plants.

The data paints a picture of a state in transition. Renewables aren’t a major energy producer in the state yet, but current production is still four times more than it was in 2018. Rhode Island is also an environmentally conscious state, pumping out the second-lowest CO2 emissions in the nation, only behind Vermont.

Solar Goals in the U.S.

Rhode Island is not the first state to push for a 100% renewable future. California was among the first to lean into clean energy, but states on both coasts are now getting involved using the blueprints laid out by early adopters.

It will take years to wean ourselves from fossil fuels – it also won’t be likely to turn our backs on such efficient forms of energy. Thankfully, renewables are rising in popularity, and their efficiency is expected to increase as innovations are achieved.

The improvement isn’t hard to see, either. In 2021, renewable energy sources totaled about 20% of U.S. electricity; it could increase due to recent tariff exemptions enacted by the Biden administration. The two-year exemption is expected to keep several upcoming solar projects on track while reducing the number of delays and cancelations over the next 18-24 months.

Companies like Sun-Pull Wire are also ready to do their part to ensure the solar industry grows as quickly as possible. This means producing solar photovoltaic (PV) bundled wire systems that are easy to install, simple to use, and can be done using fewer workers to address labor shortages or take on even more projects.

Ultimately, the goal is to make widespread utility-scale solar arrays a possible and affordable option throughout the United States.

Rhode Island’s Investment in Renewables is Important

Yes, Rhode Island is a small state, but being successful could prove that fully renewable energy is no longer a pipedream. It’s a tangible goal that can be reached with radical transformation and aggressive building toward the finish line.

The law is aggressive but also puts Rhode Island on the cutting edge of the renewables curve. Their commitment to green energy is launching it ahead of other states like California, New York, and North Carolina.

It should come without saying that the solar industry is excited to see what a renewable future looks like. We’re ready for whatever might come next and excited to help serve everyone’s solar needs today, tomorrow, and for years to come!