Supply chain constraints pushed up prices in every segment of the U.S. solar industry sector during the second quarter, a first in seven years, according to the latest numbers from the Solar Energy Industries Association and Wood Mackenzie, a unit of Verisk Analytics Inc (Nasdaq: VRSK).
What Happened: The price increase in the second quarter was led by the utility-scale segment at about 6% year-over-year and many solar developers, despite sufficient inventory, will continue to see price increases in 2022, the report titled “U.S. Solar Market Insight” said.
“This is a critical moment for our climate future but price increases, supply chain disruptions and a series of trade risks are threatening our ability to decarbonize the electric grid,” said SEIA president and CEO Abigail Ross Hopper, adding federal action is required in order to incentivize domestic manufacturing and drive enough solar deployment.
The U.S. President Joe Biden‘s administration last week unveiled a blueprint showing the United States can get 40% of its electricity from solar energy by 2035.
Why It Matters: As per the report, despite the price hikes, the U.S. added a record 5.7 gigawatts of solar capacity in the second quarter. New, forecasts indicate that the U.S. will average just over 29 GW of new annual solar capacity additions through 2026.
That estimate is far short of the deployment pace needed to reach President Biden’s 2035 clean energy targets. To meeet these targets the solar industry must install more than 80 GW of solar annually from 2022 through 2035.
Tesla Inc‘s (NASDAQ: TSLA) solar business — born out of the acquisition of SolarCity — and Sunrun Inc (NASDAQ: RUN) provide residential solar panels and batteries and compete with rivals such as First Solar Inc (NASDAQ: FSLR), Daqo New Energy Corp (NYSE: DQ).
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