Solar industry in Colorado, across US expected to shine in 2022

 

Government and financial analysts are predicting what industry representatives say they see happening on the ground: 2022 is likely to be a big year for solar energy.

The U.S. Energy Information Administration said it expects nearly half of new energy generating capacity to be solar. The agency expects to see roughly 46 gigawatts of new utility-scale solar power added in the U.S. in 2022.

One gigawatt of solar power is enough to supply about 750,000 homes.

The financial services corporation S&P Global Platts said most new generating capacity will come from solar power this year, followed by wind energy.

“I think we’ll have a bumper year. Demand is not abating in any way,” said Mike Kruger, president and CEO of the trade group Colorado Solar and Storage Association.

Utilities, including Xcel Energy, Colorado’s largest provider of electricity, and smaller utilities such as the Platte River Power Authority, are adding new projects this year.

“Rooftop solar demand is up so much that my guys can’t keep up,” Kruger said.

After taking a dive when the coronavirus pandemic started in 2020, the solar industry regained ground, according to the Solar Energy Industries Association. Solar energy made up 54% of all new electric generating capacity in the first three quarters of 2021, according to a recent report released by the group.

However, ongoing supply-chain problems and price increases led research firm Wood Mackenzie, which prepared the report, to scale back its outlook for growth in 2022 by 33%, or a decrease of 7.4 gigawatts.

Through the third quarter of 2021, Colorado had enough installed solar capacity to power 438,842 homes, according to the SEIA’s data. There were 6,771 jobs in the industry and 347 solar companies in the state.

Along with other industries, the solar energy sector is also struggling to find people to fill openings.

“I literally talk to companies every day that are hiring,” Kruger said. “There’s an installer on the West Slope who’s running three crews and he said if he could, he would go to six crews in the spring when the snow melts.”

Kruger said the solar association will hold a job fair during its regional conference, which runs Monday through Wednesday in Denver.

Tariffs and the big jump in shipping-container costs are other hurdles facing the solar energy industry because many of the solar panels are made in China. Reuters reported Thursday that President Joe Biden is considering extending the Trump-era tariffs on solar panels, with some changes, in an effort to stimulate domestic production.

The tariffs are due to expire Feb. 6.

“The current tariffs are creating a disadvantage for the U.S. solar industry just at the time when we are working to increase solar adoption and meet 100% renewable goals being set by states and the federal government,” said David Amster-Olszewski, founder and CEO of Denver-based Sunshare.

The 18% tariffs on top of other related tariffs have made the cost of solar panels in the U.S. up to 70% higher than in other countries, Amster-Olszewski said in an email.

The U.S. solar industry was also looking to the approval of the Build Back Better bill stalled in Congress to extend investment tax credits. A provision in the bill would increase the credit to 30% from 26% and keep it in place for at least 10 years.

“Failure to extend the (credit) would increase costs and hit Coloradans right in the wallet,” Kruger said.

The current 26% credit is set to drop to 22% in 2023 and then to zero for residential installations and 10% for commercial installations.

Despite some of the clouds on the horizon, Kruger said he expects demand for large-scale and community solar projects to keep rising.

“We’re going to see more solar installed this year than we did last year, which was more than the year before.” he said.

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