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What Happens When the U.S. Solar Moratorium Ends?

Posted on March 25, 2024 by Mike Zimm

When the Biden administration implemented a tariff moratorium in June 2022 on solar panels and other products, the goal was to encourage more solar development while domestic producers and manufacturers could catch up.

Fast forward nearly two years later, and the moratorium is about to expire. While some companies and industries have prepared for this day, others have been feverishly looking for alternatives. But with only a couple of months to go before new tariffs kick in, what can we expect to happen?

The biggest questions we currently face are related to ongoing solar development. What will happen to current projects relying on foreign solar panels? Who stands to benefit most from reimplementing tariffs, and who could lose? How will disruptions like this impact our renewable energy goals?

How We Got Here

The U.S. solar industry has been growing for years, mainly because of low-cost solar panels from China, but their relationship has had its difficulties.

In 2012, the United States placed anti-dumping duties on Chinese photovoltaic (PV) panels containing crystalline silicon. Anti-dumping duties are a defense mechanism governments use to protect domestic producers from below-fair-market value products imported from overseas.

Chinese manufacturers soon began moving their solar operations to Taiwan to avoid the tariffs. Not long after, in 2015, the U.S. expanded its duties to include Taiwan, too.

By early 2022, the situation had bubbled into a full-blown problem. The U.S. Department of Commerce began investigating possible tariff circumvention by China through four additional countries, including Malaysia, Vietnam, Thailand, and Cambodia.

One year later, the Commerce Department confirmed five companies out of eight investigated had circumvented anti-dumping duties. Other companies not under investigation at the time were also found to be skirting the tariffs.

So, Why Did We Issue a Moratorium?

There has clearly been some bad blood brewing between the U.S. and China. But why did the U.S. issue a moratorium on solar panels, racking, and other components from Malaysia, Vietnam, Thailand, and Cambodia?

Long story short – it had to. Thanks to the moratorium, solar projects could continue without delays. It also allowed the industry to keep growing while domestic production ramped up.

The government also had time to investigate the circumvention allegations without handcuffing the solar industry during a vulnerable time.

The Sun is Shining for Solar. Why?

By all accounts, 2023 was a fantastic year for solar generation.

In 2023, the U.S. added more than 30 GWdc of solar power to the grid, accounting for more than half of all new electricity. But more solar power means more than just more electricity.

Solar Energy Industries Association (SEIA) president and CEO Abigail Ross Hopper says solar energy generates tons of money through investments and jobs.

“Nearly half of all solar capacity on the grid today has been installed in the last three years, generating over $120 billion of private investment and thousands of jobs across all 50 states,” Hopper explained.

But a lot of importing had to happen to get to this point. In the first quarter to the third quarter of 2023, the United States imported about 40.6 GWdc of PV modules. In most cases, the panels were exempt from Section 201 duties, which protect domestic industries from import threats.

Looking Ahead

The SEIA forecasts another strong year for solar in 2024, though it will likely be less impressive than last year’s growth.

Experts predict double-digit increases for commercial, community, and utility-scale solar this year, but residential install rates may slow. The organization attributes the potential slowdown to higher interest rates keeping homeowners on the sidelines until conditions improve.

Commercial – 19%
Community – 15%
Utility – 26%
Residential – (13%)

The states leading the charge are also the ones you would expect, with a couple of surprises. Texas, California, and Florida are sunny states with plenty of room for solar arrays. Colorado and Ohio, two surprising states making strides, are leveraging clean energy initiatives and solar-adjacent industries, respectively, to add renewable energy to the grid.

Solar Expansion Isn’t All Because of the Moratorium

The moratorium affected the U.S. solar industry, but was it as significant as some may believe?

It stabilized short-term supply chains for solar companies and allowed domestic producers to increase production. A steady supply of low-cost solar panels from Asia kept U.S. solar projects on time while preventing delays and cancellations that could have set the industry back.

But the moratorium was only one piece of the solar puzzle.

Price is generally an issue for new and emerging technology but is less problematic as it ages and improves. Solar panels are a prime example of this idea in action. Module prices have fallen 99.8% since 1976, including an astounding 15% per year between 2010 and 2020.

Solar technology is getting better and more affordable every year, opening the door for mass adoption.

But what good are solar arrays if communities and utilities have issues storing the vast amount of electricity produced? Utilities use fossil fuels when renewable energy sources like solar and wind are not generating enough power. As we move away from fossil fuels for renewable options, the need for battery storage becomes more critical.

Battery storage costs have fallen at nearly the same pace as solar panels, slipping 85% over the course of a decade. Installing batteries to store electricity is becoming a more cost-effective solution for temporary increases in energy production.

Leaning Into Solar

The hard costs of solar have long been a barrier to entry for solar companies, utilities, and homeowners. Luckily, the tide is turning and opening the door for more Americans, including those in smaller rural communities, to participate in low-cost electrical production.

Hard costs have fallen steadily as technology, supply chains, and, most importantly, availability improve. At the same time, panel efficiency and battery storage are hitting record highs and showing no signs of slowing down.

Unfortunately, unpredictable solar soft costs are a thorn in the side of utilities, companies, and community-scale solar projects. These costs are often difficult to gauge because different states have different permitting processes. Some states are also more solar-friendly than others.

Attractive Tax Incentives

How does the government encourage more domestic manufacturing and renewable energy adoption in the U.S.?

It all starts with making the right investments.

Federal ITC (Investment Tax Credit) and PTC (Production Tax Credit) adders are an attractive incentive for solar companies and utilities. ITCs reduce upfront costs, making solar projects more affordable and helping generate profits faster. PTCs are more long-term incentives to encourage larger projects to help more consumers.

Individual states, like Rhode Island, California, New York, Texas, and Florida, have many policies and incentives to spur solar projects. These can range from tax credits or deferrals to renewable energy certificates. Each incentive drives down investment costs while creating low-cost energy for consumers.

Federal and state programs work together to promote cleaner sources of energy that generate electricity for consumers without raising electric bills. Consumers also have a say in renewable energy, opting for cleaner community-based options with fewer environmental impacts.

What Happens When the Moratorium Ends?

June is quickly approaching, and with it comes the end of the solar panel moratorium. What happens after that is somewhat of a mystery.

Prices will likely rise as the tariffs tack on more import taxes. Meanwhile, domestic production of photovoltaic cells, panels, and other solar system parts is starting to take off.

There are currently 16 solar manufacturers in the U.S., including First Solar, the largest utility and community solar producer. The increase in domestic production has also brought in several large-scale international players, including QCells, whose solar panels are a leader in the residential market.

The Supply Chain Could Hiccup

The solar panel supply chain will not fall apart, but it could face strain caused by companies looking for other options.

Why would companies look for other options if there isn’t a shortage of overseas panels? The panels may still be more cost-effective than U.S.-made ones, but tariffs, duties, and other taxes can drastically affect the cost of those PV products.

Companies are always looking for more cost-effective solutions to bolster the bottom line. If doing business with Asia is too expensive, solar installers may consider using manufacturers in other countries. However, it takes time to set up new sources, which could add time to shipping and create delays.

Domestic production would likely reduce supply chain delays eventually, but the products are more expensive. Companies also don’t have enough supply to address total demand – but that will change as more manufacturers come online.

Although higher domestic prices seem similar to overseas tariffs, the shorter domestic supply chain reduces potential delays.

Short-term Struggles Lead to Long-Term Progress

Ending the moratorium doesn’t mean U.S. solar companies will lose access to overseas solar panels and other products.

If anything, it allows the U.S. to compete on a level playing field with other major exporters. Solar growth may slow in 2024 and even into 2025, but it will not be a death knell. Domestic manufacturing is rising, and the benefits far outweigh the perceived negatives.

The United States has a lot riding on its renewable energy programs, including solar and wind. Developing and bolstering manufacturing tied to those industries helps us one day produce electricity without relying on traditional fossil fuels. It also opens the door for us to export our own products to other countries.

We have a unique opportunity to address electrical grid reliability while reducing greenhouse gases. As with anything, it will take time, investment, and labor, but the country is making strides toward a cleaner future.

PURPA 101: How a 45-Year-Old Law Impacts Solar EPCs Today

Posted on December 5, 2023 by Mike Zimm

When the Public Utility Regulatory Policies Act (PURPA) was signed into law on November 9, 1978, it put the wheels in motion for renewable energy to thrive.

PURPA was designed to address an oil crisis that had gripped the United States throughout the early 1970s and prevent future issues from happening by fostering more domestic energy independence, and its goals were simple:

Address and improve U.S. electric use
Create pathways for better electrical utility energy efficiency
Drive better rates for consumers and increase market competition
Provide avenues for renewable energy development

At the time of PURPA’s enactment, hydroelectric was a major renewable energy player. Since then, the industry has exploded with the expansion of solar energy systems, wind turbines, geothermal, biomass, and others.

Several forward-thinking states, including New York, California, North Carolina, and Arizona, are leading the way. These states are investing in renewable energy at scale, enacting renewable portfolio standards, making permitting easier, and opening the door for companies to take advantage of substantial tax incentives.

Today, more than 21% of our energy comes from renewable sources like solar and wind. We’ve also made massive strides toward diversifying energy sources while curbing fossil fuel use and making long-term commitments to renewable energy use.

What is PURPA? What Does It Do?

Simply put, PURPA promotes energy diversification and competition in the electric generation industry. Though the word of the law sounds great, how does it translate to the real world?

Qualifying Facilities and Avoided Costs

Under PURPA, utilities must buy electricity from qualifying facilities at an “avoided cost.” This might sound like a packed sentence full of industry jargon, but the process allows utilities and renewable energy generators to work together peacefully.

The first thing to do is explain what qualifying facilities (QFs) are. A qualifying facility is an energy production site generating less than 80MW of renewable power. It can also be a small co-generation plant producing electricity and thermal energy using a singular fuel source. Depending on the situation, the site must fit the descriptions in 16 U.S.C. §796(18)(A) and 18 CFR 292.203.

Now that qualifying facilities have been explained, it’s time to move on to avoided costs. Avoided costs are the amount a utility company must pay a renewable energy generator for its energy. The cost is equal to the amount the utility would avoid by not producing the same amount of electricity but can be based on other negotiated rates.

The avoided cost rules were updated with 2005’s Energy Policy Act, removing the mandatory purchasing rule for utilities in competitive wholesale markets for qualifying facilities larger than 20 MW. The rule remained unchanged for smaller electric power generators producing less than 20 MW, even in competitive markets.

Who Benefits from Avoided Costs?

Avoided costs sound like something designed to handcuff utilities to renewable producers, but both operators benefit.

Utilities avoid generating electricity when they don’t have to, leaving room for increased capacity when more power is needed. Purchasing electricity from companies using renewable sources like solar panels and wind turbines also helps offset pollution caused by traditional fossil fuels like coal, oil, or natural gas.

Renewable energy producers benefit from avoided costs because they receive a guaranteed market to sell into. Because the utility must buy electricity from the renewable generating company, solar EPCs (Engineering, Procurement, and Construction) can better manage costs associated with installing panels, interconnections, and everything else tied to coming online.

Renewable companies also qualify for state and federal exemptions that help reduce operational friction. These include mandatory purchase agreements, interconnection guarantees, and other requirements like public utility regulation and taxation from states. The rules help get renewable projects off the ground more quickly and profitably so they can start supplying electricity to consumers.

Why PURPA Makes Sense for Solar

Although PURPA supports all types of renewable power, solar energy producers have taken advantage of the law in several ways.

Fair Competition – Consumers get lower costs for electricity based on available and affordable options. By requiring utilities to buy renewable power, consumers benefit from more energy diversity and can choose what power they want.

Environmentally Friendly – PURPA has been instrumental in adding more than 100 GW of renewable electricity to the grid. The increase in renewable power has also lowered our dependence on domestic and foreign fossil fuels while bolstering clean energy.

Better Financing – Several tax credits associated with PURPA make it easier and affordable for solar EPCs to establish energy projects. Investment Tax Credits (ITCs), Production Tax Credits (PTCs), and even property and sales tax exemptions are just a few credits installers enjoy.

Rules also provide small solar sites with a safety net in the form of guaranteed energy purchasers and markets.

PURPA Gets an Update

The 1970s had its share of turbulence, and the U.S. economy was much different than it is today.

When PURPA was signed into law, the country had just recovered from a severe oil crisis, and there were legitimate concerns about natural gas supplies. Today, we have vast natural gas stores and low-cost energy production methods.

Unfortunately, the gas crisis of the 1970s has been replaced by climate concerns, and countries are pushing to become carbon neutral by 2050. The situation has forced the U.S. to reexamine what PURPA is trying to accomplish and rework the law to fit today’s changing needs.

The law has been through several amendments, most recently in 2020. Order 872 has been controversial but modernized several parts of PURPA to fit today’s economic climate. Depending on who you ask, the changes aren’t all for the better, but the goal is to make things as fair as possible for solar installers, utilities, and end consumers.

Avoided Costs Get Adjusted

In the early days of PURPA, utilities could be locked into long-term fixed energy rates that sometimes meant paying far more for electricity than it cost to produce.

The new rule allows for more flexibility in pricing using multiple indexes and sources, making for a better, more accurate, and transparent pricing structure. Though the rule impacts costs, it doesn’t touch capacity rates, which control how much electricity is produced. Still, losing the long-term energy pricing contracts could make it harder for solar installers to finance projects.

Order 872 also changed the criteria for locking in long-term contracts. Previously, projects could lock in using power purchase or other agreements. Now it is moving toward companies showing financial viability before finalizing contracts.

The One Mile Rule

Under the old rule, capacity was capped at 80 MW for same-site facilities, including energy facilities of the same type found within a mile of a Qualifying Facility.

The new rule is similar but adds a 10-mile rebuttal. Anything further than 10 miles from the QF is now considered a separate site. This means facilities with the same power source less than 10 miles from a QF can qualify as the same site, including them in the 80 MW capacity.

Competitive Market Access

Under this rule, utilities can avoid power purchase agreements if the Qualifying Facilities can access competitive markets.

The old rule established the threshold for QFs to sell to utilities for avoided costs at 20 MW but has been lowered to only 5 MW. One wrinkle in the rule is that the lower threshold applies to power production but not co-generation plants.

Potential Concerns

Though PURPA’s amendments impact utilities and solar companies, the goal is a steady supply of clean energy from multiple sources at prices the average consumer can afford.

The changes also have the unintended effect of altering the relationship between the two entities – sometimes not for the betterment of solar installers. Ditching fixed revenue streams may create problems for companies wanting to build but can’t rely on receiving a steady check. Variable revenues mean companies are tied to the market rather than standard avoided cost metrics.

Lower mandatory purchasing size thresholds also mean less market certainty against more competition. If there’s too much risk, it could have a chilling effect on solar EPCs and other renewable builders.

PURPA Changes Are Mixed

The new rules have been around for about 3 years, and we’ve seen a few trends developing.

Solar Isn’t Slowing – It was feared at first that solar development would be shaken. If anything, the pace has increased, especially as the government pushes for renewable energy development.

Consumers Are in Control – Today’s electricity customers benefit from lower costs and have more electricity options than ever, including emerging renewable sources like solar and wind.

Utilities Made Some Gains – Utilities have the right to negotiate for variable avoided cost rates that don’t tie them to a potentially costly contract. They also have the power to define rates based on several indexes and economic factors.

Time will tell how these changes shape the industry landscape, but overall, PURPA has been a boon for the solar industry. Even as conditions change, it’s only fair the rules guiding us adapt and grow alongside it, too.

Can Solar Energy Improve Microgrid Performance?

Posted on October 27, 2023October 27, 2023 by Mike Zimm

In 2003, a summer blackout caused by a severe storm cut power for more than 50 million people across eight U.S. states and parts of Canada.

Since then, the country has invested millions of dollars into resilience projects, ranging from hardening the electrical grid to moving transmission cables underground. It’s also given rise to the concept of the microgrid.

As companies, communities, and utilities inch closer toward renewable forms of energy, microgrids are becoming more popular. But what is a microgrid, and how does the rise of solar and other renewable sources impact their expansion? More importantly, can independent energy grids improve electrical delivery for the millions of people relying on it?

Microgrids Explained

If you’re unfamiliar with the term, a microgrid is a localized energy producer and provider connected to the larger power grid. It generates electricity to power communities, companies, and critical infrastructure and immediately disconnects from the larger grid to operate as a standalone power source during an emergency.

There are hundreds of these systems across the United States. According to the Department of Energy (DOE), there are 461 operational microgrids established across the country, powering everything from hospitals and universities to emergency shelters, research facilities, and military installations.

Other organizations are even more optimistic about the standalone grid’s adoption. The Center for Climate and Energy Solutions suggests nearly 700 operational microgrids are in the U.S., totaling 4.4 GW of electrical power. Meanwhile, Wood Mackenzie has said solar and storage capacity grew 47% from 2017 to 2022.

Why They Work

Microgrids work because they generate and distribute electricity to the surrounding community. Their size also makes them less vulnerable to widespread blackouts.

When large-scale outages occur, microgrids disconnect and enter standalone mode. Disconnecting from the grid lets the system deliver power while crews work on the larger grid.

Microgrids may have a home in combined heat and power (CHP) situations, too. CHP systems use one fuel source to produce electricity and heat for a building or group of buildings. Although they tend to be small systems powering a small area, larger ones can become microgrids once connected to the larger delivery system.

Are Microgrids Solely Solar?

Although they’re generally powered by renewable electricity generation systems like solar panels and wind turbines, fossil fuel generators can also power microgrids.

Beyond being inexpensive to maintain, solar microgrids tend to be set-it-and-forget-it options. When the system has an autonomous operation system, it can produce consistent and clean energy for years with minimal manual control.

Is Solar Power Generation Changing the Game?

Photovoltaic (PV) microgrids are coming online across the United States, but are they making a difference?

The short answer to the question is yes for several reasons.

Clean, Low-Cost Power

One of the major selling points of a solar-powered microgrid is that the electricity produced generates no harmful byproducts. Sunlight and wind are wholly renewable energy sources, reducing carbon footprints while maintaining energy production.

It’s Scalable

When communities or businesses want to increase the amount of energy, all they have to do is install additional panels and connect them to the system.

Beyond that, it’s possible to increase solar efficiency (and power generated) by installing solar concentrators, sun tracking systems, and anti-reflection coatings.

Low Operating Costs

Solar costs have dropped dramatically over the years, making installing solar panels as affordable as ever. Unfortunately, the soft costs of solar haven’t seen the same decline but are improving.

Though solar installations are still expensive for community and utility-scale projects, maintenance costs are low.

Combines with Other Energy Sources

Microgrids complement CHP systems, allowing them to make the most out of alternative fuel sources to produce additional electricity for storage or adding to the grid.

Typically, CHPs use a singular fuel source like natural gas to efficiently generate power and heat without wasting heat energy. Adding rooftop or on-site solar panels creates more energy, reducing strain and fuel use for the CHP system.

Another Step Toward a Revitalized Grid

Microgrids can reduce strain on the overall electrical grid.

As smaller operations come online, improvements must be made to the grid to improve its resiliency and accommodate the additional load. They also take some pressure off other power plants by reducing the amount of power they need to generate. In the case of demand spikes, those generation plants can quickly increase electrical output.

Another occasionally overlooked benefit of microgrids is their ability to deliver electricity more efficiently than other power plants. Typically, power generation plants are found in remote areas away from cities and towns, resulting in line losses as electricity flows from the plant to substations. Microgrids avoid most line losses because they are much closer to distribution areas. Less distance means less power loss during delivery.

Problems to Solve

Although there’s a lot to love about smaller, independent grids, there are still some kinks in the system.

Microgrids naturally make the electrical grid more complex because we’re adding new systems to an aging infrastructure. Upgrades are necessary to keep everything operating smoothly, but new interconnections come at a massive cost for installers and utilities.

There is also the risk of utilities seeing microgrids as competition, seeing as how the smaller systems could reduce demand. To minimize difficulties with utilities, installers can build mutually beneficial partnerships to find common ground and solutions.

Small Footprint, Huge Difference

The evidence is clear; as the grid becomes more complex, microgrids will step up to offer reliable, consistent power to homes and businesses nationwide.

Organizations like the NREL have invested in new grid technology and development for more than two decades, and the U.S. military is utilizing microgrids for both sustainability and self-defense. Additionally, smaller communities find community-scale solar installations a low-cost solution to rising energy costs through subscription and ownership stake plans.

We have so much to be excited about, but everything is still a work in progress. Regulations are hard to navigate, and there isn’t a standard set of rules guiding microgrid installers or the utilities they work with. Installers also have to contend with high interconnection costs as utilities decide how to compensate communities and customers for adding electricity to the grid.

Threats to the grid aren’t slowing down, making it vital for the U.S. to have a robust grid to supply power to everyone. Microgrids could be the answer to increasing reliability and safeguarding against future power outages, threats and attacks.

What is Community-Scale Solar?

Posted on September 28, 2023September 28, 2023 by Mike Zimm

When most people think about solar installations, two types generally come to mind: rooftop and utility-scale.

Rooftop or backyard residential PV solar panels provide enough electricity to power a home or small business. Meanwhile, utility-scale operations are designed to power towns, cities, and even regions.

But there’s a third option emerging in the U.S.: community-scale solar. Larger than residential but smaller than utility-scale, community-scale installations range from a few megawatts to tens and power communities.

Small Footprint, Large Impact

True to its name, community solar projects are small, usually less than 5MW, but can generate enough electricity to power thousands of homes.

Unlike utility-scale solar locations, which utilities develop on owned land, community solar farms live on leased land and get installed by EPC (Engineering, Procurement, and Construction) solar companies like Schuler-Haas, Nexamp, and TerraForm. Once complete, residents and businesses can subscribe to the site and receive credits.

Smaller solar arrays are picking up steam in several states, including New York, California, Minnesota, and Massachusetts, but can be found in more than 40 states, Washington D.C., and Puerto Rico. Although solar installations were down 16% in Q2 2023 compared to 2022, about 226 MWdc of solar was added to the grid.

The good news is the Solar Energy Industries Association (SEIA) expects growth from 2024 through 2028, thanks to better policies and more interest.

How Does Community Solar Work?

Community-scale solar is unique in size and operation, making it viable for people who can’t fully invest in solar but want to participate.

Unlike installations owned by a single person, business, or utility company, community solar projects benefit groups of businesses and individuals throughout the service area. They can either pay to own a portion or subscribe to a community solar installation, allowing them to collect solar credits on their electricity bills.

But what are solar credits, and how do they work? As the solar array generates electrical power, subscribers and owners collect credits based on the electricity produced. Those credits are then applied to their utility bills.

According to the NREL, about 49% of households and businesses can’t have rooftop solar. For those who can’t afford a residential PV system or don’t have the right conditions to support one, community solar is an option.

Even better, the energy produced by community solar goes straight from the array to the grid and is delivered directly to those living nearby.

Is Community Solar Worth It?

With all the talk of subscriptions and credits, community solar sounds complicated, but it’s a popular choice for consumers and builders for several reasons.

Accessibility: Community solar allows people to invest and benefit from solar installations with a low-risk investment. They still reap the rewards of solar power without the massive upfront purchase to install panels.
Cost savings: Community solar is a low-cost electricity producer compared to traditional fossil fuels.
Supports the local community: Solar installations create jobs and can support sustained regional economic growth.

Varies energy sources: Renewables can support traditional fossil fuels during periods of high demand. They can also help supply power in the case of an emergency when fossil fuel sources are offline. Solar arrays also help develop microgrids, which limit the spread of blackouts if a problem arises.
Cleaner energy: Solar panels produce no by-products, and the sun is an infinite fuel source. Energy storage and consistent production are still troublesome, but the technology needed to address and mitigate those problems is quickly evolving.

Of course, not everything is perfect. Every investment, including community solar, has inherent risks.

Drawbacks and Concerns

Despite renewable energy projects earning the praise of agencies, organizations, and the public, every emerging technology has its fair share of challenges. It’s especially true when attempting to integrate them into older installations.

Interconnection Issues: According to a 2022 White House statement, about 70% of U.S. transmission lines are 25 years old or older, with many pieces coming online in the 1960s and 1970s. Unfortunately, that makes it harder for solar installations to integrate. In those situations, the difficulty of integrating leads to expensive delays, long waiting lists, and high connection fees to cover costs.
Overpowering the system: Substations are designed to handle occasional overcharges or power surges, but not constantly. When a massive influx of electricity is added to the grid too quickly, it can lead to outages and damage.
Location issues: In rural communities, solar installations may be miles from load centers. Getting power to the load center for distribution means more money, time, and labor is needed. These costs ultimately lead to a higher project cost and delayed ROI.
Storage Issues: Solar energy is infinitely renewable but hard to store. Effective battery solutions are available but are expensive, and the technology hasn’t reached its full potential yet. Storage also becomes an issue in places where the sun isn’t shining every day and locations where snow is an issue.

As technology improves and more utilities invest in renewable technology, it will become easier to interconnect with the larger grid. In the meantime, smaller installations can create microgrids that connect to the larger grid but reduce the effects of an outage in their communities.

What is the Growth Potential?

Thanks to several pieces of federal legislation, solar and other renewable energy sources are having a coming out party.

Solar has accounted for about 45% of all new electricity-generating capacity added to the electrical grid this year, including 226 MWdc of community solar in Q2 2023. The good news doesn’t end there, as experts claim more advancements are coming.

Global research organization Wood Mackenzie recently touted the strength of community solar, suggesting the industry could grow nearly 120% through 2027. The report also notes that the country could add another 6 GW of electricity to the grid by then. Currently, about 5.27 GW has been installed.

Several states are leading community solar solutions, including New York, which hosts about half of the U.S.’s installed total. However, new laws, including the Inflation Reduction Act (IRA), have put solar in a much stronger position in the coming years.

The IRA coincides with a 24-month moratorium issued by the White House on solar panels from four Asian countries: Thailand, Vietnam, Malaysia, and Cambodia. The moratorium expires in June 2024 and is designed to help get domestic solar production off the ground while giving companies and utilities access to lower-cost solar panels to complete ongoing projects.

Domestic production is expected to improve for balance of system products like PV wire, panels, and racking materials, and organizations like Wood Mackenzie and the SEIA are confident the industry will flourish.

High Potential, Low Cost of Entry

There are plenty of tax credits and incentives to get people involved with residential solar, but barriers to entry are still high. Options like community solar reduce investment costs while helping people do something good for the community, the environment, and their wallets.

It also comes in handy for people living in low-income and rural areas, where credits can impact how much they pay for the electricity they consume. Rural locations also tend to have more space for solar installations, shortening the distance from the array to a load center.

The benefits of community solar are undeniable, but there are still hurdles. Our electrical grid is rapidly aging, making it difficult to efficiently interconnect with existing substations and other infrastructure. If the substations and grid technology are too old, it will be harder to integrate efficiently.

We’re getting closer to a world run by renewables. More advancements mean more opportunities for good-paying jobs, low-cost electricity, and better resilience in the face of storms and other emergencies. It will take time, but a renewable-powered future is possible.

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.

5 Solar Trends We’re Watching in 2022 and 2023

Posted on October 19, 2022 by Mike Zimm

The solar industry is growing by leaps and bounds, leaving many to wonder what the next phase of growth might look like and when it could arrive.

President Joe Biden has expressed the need for more renewable energy to meet the country’s ambitious environmental plans. The ultimate goal is to move to a completely decarbonized energy sector by 2050, but the United States will need a massive boost from its sustainable energy producers like wind, hydro, and solar power.

So what exactly does the future look like for solar? We’ve highlighted the five biggest solar power trends we think will influence the rest of this year and into 2023, and it’s a mixed bag. Some of what we’re seeing is incredibly encouraging, while other aspects give us some reason for short-term concern.

From the supply chain to overseas tariffs, these are the five biggest trends we’re watching this year.

The Supply Chain is Dictating Solar Costs

Unfortunately, the world has not recovered from the COVID-19 pandemic nearly as quickly as we had hoped for.

China’s on-again-off-again lockdowns have caused starts and stops in many manufacturing supply chains, resulting in lower availability of goods. Labor issues in the U.S. mean there aren’t enough dock workers and truck drivers to move raw and finished materials from ports, creating additional supply chain bottlenecks.

The lack of manufacturing production combined with less labor means that are fewer products available, leaving companies and utilities scrambling to source everything from solar panels and batteries to copper wire. These unintended shortages and delays have put the brakes on some utility solar projects, with some utility scale solar projects facing delays ranging from a couple months to next year.

According to the SEIA, solar prices were up 18% in 2021, though the spike can’t solely be attributed to a shaky supply chain (more on this topic later). The organization went on to say that about one-third of 2021’s Q4 capacity was delayed by a quarter, while about 13% of capacity slated for this year has been pushed back at least a year, or cancelled entirely.

The supply chain’s struggles are now becoming the entire industry’s problems. Short-term solar forecasts are down by nearly 20%, and reports suggest the industry could grow about 25% less than expected this year.

It’s not all bad news. Even with the pandemic, utility scale solar power costs dropped going into 2021, falling by about 12%. Short-term spikes in the cost of materials, including those used to make the panels, threaten to erase those cost savings, though relief seems to be on the way from the Biden administration.

The Solar Industry Is Dealing with Tariffs Galore

For several years, China has found itself the subject of anti-dumping regulations from the U.S. Simply put, dumping is what happens when a company offloads its product in another country for much cheaper than they would in their home country. According to the U.S., companies in China has been selling their solar technologies at a very low cost, making it harder for companies domestically to compete.

To fix the issue, the U.S. assigned tariffs to Chinese and Taiwanese solar panels in 2014, increasing prices by 50%. Chinese companies, though, may have used a loophole to avoid tariffs and still get their products into the U.S. by establishing companies in other countries like Malaysia, Thailand, Vietnam, and Cambodia and sending products to the U.S. tariff-free.

Today, more than 80% of the most popular solar modules come from those four countries. That means most of the panels used on utility sites in the U.S. are primarily coming from Asia, and most likely from a China-based company. In 2018, then President Trump instituted tariffs to increase the cost of manufactured products coming in from those countries.

Most recently, the U.S. Department of Commerce began looking into solar cell imports from Malaysia, Thailand, Vietnam, and Cambodia to assess whether dumping had occurred, but in early June, President Biden issued an announcement that it wouldn’t impose new tariffs on solar imports for two years. The move is expected to help get utility solar projects across the country back on track as soon as possible.

Long-term Solar Costs Will Decrease

Solar is already among the cheapest energy producers available today, but as production costs continue to drop and panel prices become cheaper and more efficient, it could open up more avenues to expand solar systems across the country.

As recently as 2020, electricity produced by utility-scale solar cost about 5 cents per kWh. The cost dropped to 3.5 cents per kWh in the most optimized regions. The hope is that solar panels become more efficient, while the costs of modules and BOS systems keep dropping.

So far the trend has held up. From 2010-2020, the cost of a utility PV solar system dropped by more than 80%. Despite a short-term increase in prices due to the pandemic, supply chain issues, and tariff concerns, overall trends show on-site project costs continuing to fall as more efficiencies are found.

For its part, Sun-Pull Wire is continuously working to revolutionize how PV wire is installed on utility scale systems. Sun-Pull’s cable solution, for example, cuts down on overall labor costs and project time by allowing a team of 3 to 4 people to install 1mW of string PV wire per day. Compared to single wire pulls, Sun-Pull’s PV wire can cut installation times by nearly 80%.

Faster installation times means more work gets done faster, increasing overall productivity of on-site teams, which helps companies address labor shortages or take on more projects with the labor they have.

Labor Shortages Are a Threat

Like many industries, solar energy is also facing a worker shortage.

Projections for the solar industry are positive, with estimates suggesting 1.5 million people could be employed by 2035, but in 2020 the industry only clocked about 231,000 workers – less than before the pandemic. To meet the Biden administration’s aggressive clean energy goals, it’s estimated that solar companies will need to employ about 900,000 workers.

With that said, productivity was still up and the hope is that the industry will continue its rapid ascent as more companies come online. As more projects are completed and adding power to the grid, SEIA believes annual growth will stay strong, but is somewhat dependent on the supply chain. Despite a shaky supply chain, the group says there is a lot of demand for solar and it will remain popular in the coming years.

The U.S. Bureau of Labor Statistics (BLS) agrees. As the country moves away from traditional fossil fuels for energy, the agency says solar, wind, and other renewables will need to step up to fill the gap.

The industry is also moving quickly to meet anticipated demand. Companies like Sun-Pull are solar innovators, finding ways to create cost savings for solar workers and energy providers. Sun-Pull’s bundled cable solutions allow even inexperienced workers to move more quickly and install PV wire to panels much faster than traditional single-pull methods.

Faster set-ups mean fewer people are needed on the job site, saving time, money, and manpower along the course of each utility-scale PV wire project.

Better PV Modules and Outputs Are Coming

In 2021, utility-scale solar produced nearly 114 million kWh, reflecting nearly 30% growth over the previous year. We expect outputs to keep increasing as more projects are added to the grid.

This coincides with other advancements in solar technology meant to increase energy production and efficiency. So far, the highest efficiency a solar panel has recorded is 47%, though most solar panels on the market today hover in the 20s. However, multijunction solar cells tend to perform better than other types.

Increasing efficiency is an important aspect of reaching our energy goals and there are several ways to make it happen. This can be done in a few different ways:

Better thermal management – This will help solar panels perform better in colder environments.

Minimize reflection – This requires non-reflective colors and coatings or using a textured surface to keep prevent solar rays from bouncing. More captured light means more efficiency.
Reducing recombination – Recombination occurs when electrons return to their regular valence band. Companies can reduce recombination by cutting down panel impurities and other defects.

Where Does Solar Go from Here?

The goal is for solar energy to eventually replace traditional power plants. While it’s certainly within reach, the industry has some catching up to do.

Solar PV energy is here to stay. Like wind, the Sun is an ultimately renewable resource that has the potential to create an incredible amount of electricity, especially in areas where the sun shines consistently. It also stands to benefit from continued enhancements, making panels and systems more reliable, efficient, and longer lasting.

Recent actions, including a moratorium on new tariffs, will go a long way toward making life a bit easier for solar companies. With fewer roadblocks and a slowly improving supply chain, the entire solar industry is poised for massive growth in the coming years.

We’re excited for the future and can’t wait to be a part of the solar revolution!

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.

Ready to Learn More About Solar?

Sun-Pull is ready to support a cleaner, renewable future with simple-to-use PV wire solutions.

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.