Clean power faced headwinds in 2021 and the pace of installations faltered
Energize Weekly, February 23, 2022
Clean power installations – wind, solar and battery storage – were down slightly in 2021 as the various sectors face challenges ranging from tariffs to expiring tax credits to regulatory uncertainty, according to the industry trade group American Clean Power (ACP).
Still, clean power purchase agreements (PPAs) by utilities and corporate customers reached a record 28 gigawatts (GW), with corporate buyers surpassing utilities for the first time with 14 GW of PPAs. Utilities accounted for 10 GW and government agencies and others the remainder.
A total of 27.7 GW of new utility-scale wind, solar and energy storage capacity was installed in 2021, a 3 percent decline compared to record-setting 2020. There was 10.5 GW of capacity installed in the fourth quarter.
“The pace of installations fell significantly short of what is required to achieve a net-zero emissions goal,” ACP said in its quarterly market report. “While 27.7 GW is the second largest year on record for combined wind, solar and energy storage installations, it is only 45 percent of what’s required to stay on track for an emissions-free power sector.”
More than 11.4 GW of projects originally slated for 2021 slipped to 2022 or 2023 for a variety of reasons.
“For the solar sector this was due to trade policies and lack of regulatory certainty impacting the availability of solar panels coming into the country,” ACP said. “The wind sector faced policy uncertainty, including the expiration of tax credits for wind projects.”
Wind installations in 2021 were down 25 percent year-over-year to 12.7 GW, with 25 wind farms with a combined capacity of 5.5 GW coming online in the fourth quarter. About 5.5 GW of installations were delayed in the quarter.
The solar sector installed 12.3 GW for the year, including 3.9 GW in the last quarter, compared to 14 GW of utility-scale solar in 2020.
Battery storage installations were up better than two-fold reaching 2.6 GW, a 1.5 GW increase over 2020. In the fourth quarter 1.17 GW of storage went into service – the first quarter to ever post more than 1 GW of capacity.
“Despite unclear policy headwinds, U.S. project owners commissioned 606 new project phases across 43 states during 2021, including 168 projects in the fourth quarter,” the ACP said.
The top five states for new installations in 2021 were Texas (7.35 GW), California, (2.7 GW), Oklahoma (1.54 GW), Florida (1.38 GW) and New Mexico (1.37 GW).
The U.S. now has more than 200 GW of total operating, utility-scale clean power capacity.
“Surpassing over 200 gigawatts of clean energy is a significant milestone for the United States,” Heather Zichal, ACP’s CEO, said in a statement. “Although the U.S. has reached this incredible achievement, more needs to be done, at a faster pace, to reach the climate goals and targets our country needs to achieve.”