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How Much Will Solar Costs Rise This Year? Large U.S. Power Plants Estimate More Than 6%

published: 2022-06-09 9:30

How much will U.S. solar costs climb this year amid the pandemic's impact on supply chains, the impact of war, and tariff investigations? US research firm Wood Mackenzie reports that capital costs for 100MWdc solar power plants are expected to rise by 6% this year.

Among them, the cost of solar energy in the United States will not only rise, but the progress of projects will also be delayed. According to the Wood Mackenzie report, Chinese solar panel manufacturers send Chinese products to Vietnam, Malaysia, Thailand, and Cambodia in order to avoid U.S. anti-dumping and countervailing duties, as California solar manufacturer Auxin Solar reported to the authorities in February. The U.S. Department of Commerce announced an investigation at the end of March.

Given that Commerce Department investigations can take up to 150 days, the progress of many utility-scale solar farms has been hit. Wood Mackenzie said it also led many solar manufacturers to shift the responsibility of "importer of record" to module buyers.

Wood Mackenzie estimates that the capital cost of a 100MWdc solar power plant in the United States will increase by 6% this year, but due to the expansion of solar manufacturing production lines in various places, the cost increase will not be too large. There are plans to add enough production lines this year to produce an additional 200,000 metric tons of polysilicon per year, plus 1 GW of cells, 1 GW of wafers, and 500 MW of module lines.

Analysts at Wood Mackenzie pointed out that India also revealed a tax on solar imports in April this year, while policies to support domestic production will also change pricing and supply chain dynamics in the United States and India.

The report did not analyze the state of solar costs in other countries but Wood Mackenzie predicts that Germany will drive European solar development over the next decade due to new German policies and a desire to reduce reliance on Russian gas. Germany proposed a new draft in March, hoping that the goal of 100% green electricity use can be pushed ahead 15 years to 2035. For this reason, annual new installations of solar energy will be increased from the original 7GW to 20GW after 2028.

Looking forward to the future, the amount of solar installations in the Asia-Pacific region is still very considerable. It is estimated that the amount of solar installations in the Asia-Pacific region will reach 110GW this year and installed capacity in China will be 75GW. This year, global cumulative installation capacity can reach 1TW. North American installations will also double compared to last year's 11% increase.

(Image:Flickr/Bureau of Land Management CC BY 2.0)

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