• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days The United States produced more crude oil than any nation, at any time.
  • 10 days e-truck insanity
  • 9 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days How Far Have We Really Gotten With Alternative Energy
  • 8 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 9 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 10 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
Why Are China’s Solar Panels So Cheap?

Why Are China’s Solar Panels So Cheap?

China's dominance in solar panel…

Solar Panel Waste is Becoming a Big Problem

Solar Panel Waste is Becoming a Big Problem

Despite regulations mandating proper disposal,…

Perovskite Solar Cell Breakthrough Boosts Performance At High Temperatures

Perovskite Solar Cell Breakthrough Boosts Performance At High Temperatures

CityU researchers have innovatively designed…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

The U.S. Is Set To Break Another Solar Record Despite Rising Costs


New solar power capacity additions in the United States are on track to book a record year despite supply chain disruptions that have seen price spikes that have effectively put an end to the cheap solar narrative. In the second quarter alone, new solar installations rose 45 percent on the year at a total 5.7 GW of installed capacity in both residential and utility-scale installations, energy consultancy Wood Mackenzie said in a joint report with the Solar Energy Industries Association. But this record has been marred by rising prices across the industry.

According to Wood Mac, price increases resulting from supply chain disruptions amid the pandemic have affected utility-scale solar installations more strongly than residential installations in what is the first solar cost increase in at least seven years. Data from the study shows turnkey prices for solar installations are currently at levels last seen in 2016. 

The data also shows something else that may potentially be more worrying. The price decline in solar has smoothened out since 2019, suggesting the space for further significant cost reductions may be limited.

This would have important implications for the Biden administration’s energy agenda, which bets heavily on solar. In fact, a study from the Energy Department has suggested the U.S. could generate as much as 45 percent of its electricity from solar farms.

“The study illuminates the fact that solar, our cheapest and fastest-growing source of clean energy, could produce enough electricity to power all of the homes in the U.S. by 2035 and employ as many as 1.5 million people in the process,” Energy Secretary Jennifer Granholm said in comments on the study. “Achieving this bright future requires a massive and equitable deployment of renewable energy and strong decarbonization policies.”

Related: The Major Problem With EVs No One Is Talking About

Indeed, this would require a massive deployment of solar power—some 1,050 to 1,570 GW of solar power, or even 1,600, per the Energy Department’s study. This is more than the total U.S. generation capacity right now and will be an increase of a staggering 1,450 percent from current capacity, according to one energy technology and policy researcher from the University of Texas.

According to Joshua D. Rhodes, who spoke to The Conversation, boosting U.S. solar capacity from the current 103 GW to more than 1,000 GW is possible, but it will not be easy. A megawatt of solar capacity needs some 8 acres. Based on this, the DoE’s target capacity would require a land area of between 10.2 and 11.5 million acres or, says Rhodes, Massachusetts, and New Jersey, taken together.

There is already nascent opposition to utility-scale solar projects from conservation activists and other groups. The WSJ earlier this year reported on one such case involving the Battle Born solar project, which will cover—literally—14 square miles, which is the size of 7,000 football fields, rendering the land useless for other purposes.

If the cost problem persists, which is quite likely given that supply chain analysts expect disruptions to continue into 2022, it would make achieving the DoE’s solar target all the more difficult. The government has indicated it will fully support strong growth in solar capacity, but this capacity has been touted as super cheap and affordable, with lots of incentives for households and businesses to go solar, too. With higher prices, these incentives might start to ring hollow, and the federal government won’t be able to pay for every added GW.

The “bright future” outlined by Secretary Granholm may be harder to achieve than believed because of these challenges. Developers are already delaying project completions because of the cost increases. If this continues, some projects might get shelved. The Wood Mac and SEIA report notes that government support remains essential, but if we are being realistic just how much support and for how long can the government provide when it is already stretching itself thin with billions planned for one or another energy-related initiative that lack unified support even among Congress Democrats?


By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News