Solar energy faces supply chain issues, policy woes

Posted at 5:31 PM, Dec 21, 2021

More companies and families are looking to solar power for electricity. But, like with many industries, supply chain issues are prominent.

“We install solar for residential, industrial, and commercial customers,” Bret Biggart, the CEO of Freedom Solar Power, said. “The [residential] business for us seems to be a really fast-growing business.”

He said his business doubled last year.

“We’re way, still, in the early stages of this deal. And when I say this deal, this solar industry and the adoption of solar across the U.S.,” he said.

The recent growth in the solar industry has come with ups and downs.

“Our market has been plagued by uncertainty at times,” Biggart said.

Supply chain problems are the most notable recent issues facing the industry.

The U.S. Solar Market Insight report released this month by the Solar Energy Industries Association and Wood MacKenzie claims policy uncertainty and supply chain issues are driving solar price increases. This resulted in a 25 percent decrease in the solar industry forecast for 2022.

“U.S. is arguably one of the largest consumers and customers in the world for this renewable energy materials and products,” Fengqi You, a professor of energy systems engineering at Cornell University, said. “I do see the supply chain congestion and delay issue as a temporary issue. It will be resolved, eventually, it will not be something that lasts forever, for years.”

“I think everybody's dealing with an inflationary period here where prices are going to rise a little bit. They've risen for us. We just raised prices, for example, last month,” Biggart said.

Infrastructure economist Jan Whittington said the cost increase could impact demand.

“The layering of these problems, this is unprecedented, entirely unprecedented. Like all of the other industries experiencing this incredible difference in cost and timing for supply chains but also the unexpected effects of the lockdown on various industries,” Whittington, a professor at the University of Washington Department of Urban Design and Planning, said.

However, Biggart said that forecast is general.

“You lump in residential, commercial, industrial plus utility-scale stuff and you look at just the general macro trends. It looks kind of wonky, because there can be things going on there that are opposing one another,” he said.

He expects to see growth, especially on the residential side, moving into 2022.

A major part of the industry's future hinged on action in Washington. Early drafts of President Biden’s Build Back Better Act included generous benefits for solar adoption.

“It’s five years of consistent 30 percent tax credit, which I think is really really fair and really helpful,” Biggart said.

The money is far from a sure thing. The bill does not have the 50 votes it needs to get through the Senate. But if it eventually passes, the Build Back Better bill could triple the amount of solar deployed in the country, according to the U.S. Solar Market Insight report.

“It would help to promote the domestic manufacturing industry,” You said.

Biggart said his company sees no signs of slowing down.

“There’s always these kinds of short-term hiccups whether it's local policy stuff or little things. But the general trend is really encouraging,” he said.