The pace of renewable-energy installations, like this wind farm outside Goldthwaite, Texas, has slowed to a crawl.
Even as developers plan an unprecedented number of grid-scale wind and solar installations, project construction is plummeting across the U.S.
The pace of renewable-energy installations, like this wind farm outside Goldthwaite, Texas, has slowed to a crawl.
By Jennifer HillerFollow | Photographs by Sergio Flores for The Wall Street Journal
Jan. 22, 2023
Even as developers plan an unprecedented number of grid-scale wind and solar installations, project construction is plummeting across the U.S.
Despite billions of dollars in federal tax credits up for grabs and investors eager to fund clean energy projects, the pace of development has ground to a crawl and many renewables plans face an uncertain path to completion. Supply-chain snags, long waits to connect to the grid and challenging regulatory and political environments across the country are contributing to the slowdown, analysts and companies say.
New wind installations plunged 77.5% in the third quarter of 2022 versus the same period the year before, according to S&P Global Market Intelligence. New utility-scale solar installations likely fell 40% in 2022 compared with 2021, according to a report from the Solar Energy Industries Association and research firm Wood Mackenzie.
The decline belies enormous demand for renewable projects. The industry is ready to launch a would-be building spree after last year’s spending and climate law, the Inflation Reduction Act, extended and increased tax credits for wind and solar projects and introduced new incentives for green hydrogen and battery storage for the electric grid. The success of the IRA, the Biden administration’s climate targets and many state decarbonization plans hinge on adding massive amounts of renewable energy into the grid.
A technician exiting a wind turbine at the recently completed wind farm outside Goldthwaite. Swift Current Energy finished building dozens of wind turbines in the area.
More than $40 billion in wind, solar and battery projects were announced in three months late last year—as much as the total clean-energy investment for all of 2021, according to the industry group American Clean Power Association. Large corporations with climate targets are among the most eager buyers of green power, contracting for enough wind and solar capacity last year to power more than 1,000 data centers.
“Ten years from now there’s going to be a huge shift in the landscape where there is going to be a significant amount of electricity coming from renewables,” said Matt Birchby, president of renewable-project developer and owner Swift Current Energy LLC. “But getting from A to B is inherently going to be messy.”
Supply-chain and trade issues have complicated planning. Average lead times for securing high voltage equipment have risen from 30 weeks to more than 70, Mr. Birchby said.
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Sourcing solar panels has turned into the stuff of spy stories as companies try to avoid running afoul of trade regulations and navigate risks and complications of global shipping. “You almost feel like you’re in a Tom Clancy novel,” Mr. Birchby said. Swift Current Energy has contracted to purchase nearly $1 billion in American-made solar panels, he said.