The distributions in the supply chain have affected every industry including Solar. So what’s happening and will it be changing anytime soon?
- What’s Happening
It’s not just consumer products that are feeling the pinch in our global supply chain. The Solar industry is one of the many industries being affected by supply chain disruptions due to COVID and other factors. This has affected the residential, commercial, and utility solar industries resulting in elevated shipping costs, low inventory, and delays in project installations. Addressing these disruptions will be critical in addressing the impacts of climate change and meeting the renewable energy targets set by the current administration.
- How It’s Going
These disruptions don’t look like they’ll be stopping anytime soon. Because of this solar installers will see more challenges to logistics and may have to find different distributors or manufacturers. There will likely be a significant shortage of solar modules in 2022. Setting up a full US-based supply chain would be huge for the industry and eliminate any concerns about unethical forced labor in other countries. There are no easy fixes for the situation in the short term, but we need to improve the solar supply chain in the long term.
- It’s Getting Political in Here
We always have to deal with politics in renewable energy. The DOE recently received $40 Million in funding for grid decarbonizing solar technology and to reduce the cost of solar and energy storage. In addition, the new infrastructure bill would extend the ITC providing some long-term stability and incentives for solar along with funding for disadvantaged communities and creating more jobs in renewables. On the other side of the coin, we have the Commerce Department investigating two separate tariffs issues around module imports from China. These tariffs could be potentially catastrophic to the industry, and while no decisions have been made, we are already seeing effects in the supply chain. The valid concerns around forced labor issues in polysilicon manufacturing are also stopping imports of some solar products at the border. Add all of this to the general supply chain issues, and we have some serious challenges that could be major setbacks.
- Final Thoughts
Because these issues do not seem to be changing anytime soon the Solar industry is going to have to be creative, and address the problems logistically because managing these challenges will be crucial to expanding the growth of the industry. However, there are other issues that make the whole situation more complex such as the talent shortage. Read up about that, and other issues like vaccination status on our blog.