Hardware shortages may slow solar growth in 2016

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Dive Brief:

  • The rush to install solar before the 30% federal investment tax credit (ITC) reverts to its pre-2006 10% levels at the end of 2016 has sparked a backlog of orders for modules and inverters that could slow solar growth, ECT reports.
  • The shortage is causing scheduling difficulties for electric cooperatives developing utility-scale and community solar projects with average delivery times set at six months from large manufacturers and distributors, and could be fully booked for 2016 by early December.
  • The National Association of Rural Electric Cooperatives urged members to place 2016 solar hardware orders before the year’s end.

Dive Insight:

The bottleneck in orders has birthed concern from 14 electric cooperatives participating in the Department of Energy-sponsored Solar Utility Network Deployment Acceleration (SUNDA) project, which aims to increase co-op deployment of solar.

If the U.S. Congress doesn’t extend the ITC, it will drop to 10% for commercial solar investments and zero for residential solar investments in January 2017. Such a concern has pushed installers and customers to throw up solar panels before the tax credit sunsets, which is causing a backlog for orders and might depress growth in the solar sector.

For the co-ops and DOE program, the backlog could hurt the co-ops. The program developed a standardized development package of engineering designs, business models, financing and insurance options and optimized procurement. The goal: Cut engineering design costs 25%, consolidated procurement costs 10%, and insurance costs 25% and bring the total installed cost down to $1.60 per watt.

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John Fitzgerald Weaver
Solar Power Plant Project Developer at Commercial Solar Guy
John Fitzgerald Weaver is a solar developer, digitally as the 'Commercial Solar Guy.' As a project developer and installer, he’s sold and managed 50+ solar projects, totalling over $25 million - with their sizes ranging from 5kW to 1500kW. He’s been involved in many aspects of the solar supply chain – as a company founder, developer, project manager, manufacturer, permit runner, salesman, contractor and financier, climbs mountains, played football, enjoys an IPA or scotch, needs to get away, and really loves this strange connection between politics, energy, finance, environment, etc in the energy world, and likes run on sentences.