Renewable energy investment in the U.S. will have to grow significantly to put the country within reach of international climate targets and the Biden administration's goal of eliminating carbon dioxide emissions from the power sector by 2035, the American Council on Renewable Energy said June 7.
Investors put $58.5 billion toward renewable energy projects, grid-enabling technologies and transmission for integrating renewables in 2021, the nonprofit renewable energy group said in a report. That is well short of the $96 billion of average annual investment the group said will be needed to deliver on its campaign to reach $1 trillion of private investment by the end of the decade.
That is about how much funding will be needed to decarbonize the U.S. power sector and to "stay within striking distance of the U.S. commitment for greenhouse gas emission reductions outlined in the Paris Accord" on climate change, ACORE has said. So far, the U.S. renewable energy industry has raised only 23%, or $228.3 billion, of the American Council on Renewable Energy's, or ACORE's, targeted 2030 investment total, the group said.
"[We] have lost precious time that we do not have to achieve America's clean energy goals and combat the climate crisis," ACORE President and CEO Gregory Wetstone tweeted June 7.
A trade investigation by the U.S. Commerce Department added to headwinds buffeting the country's solar market, ACORE said.
Imports slowed after the Commerce Department said in March that it was looking into whether solar manufacturers moved some operations to Southeast Asia to circumvent tariffs on shipments from China. Top investors and project developers that ACORE surveyed said the disruptions had jeopardized well over half of the money and installations they planned to deploy this year.
U.S. solar installations fell by 24% in the first quarter of 2022, to 3.9 GW, compared to the first quarter of 2021, mainly due to problems in global supply chains and "trade policy disruptions" late last year, the Solar Energy Industries Association, or SEIA, a lobbying group, and the consulting firm Wood Mackenzie, said in a separate market report June 7.
To get the solar market moving again, the Biden administration said June 6 that it will delay potential tariffs from the trade investigation for two years while it tries to boost domestic manufacturing using the Defense Production Act.
ACORE welcomed the intervention by the Biden administration but said it was "deeply troubling to see how confidence in the renewable energy sector, which was at an all-time high last year, has been undermined by the destructive tariff inquiry" at the Commerce Department.
In addition to the government's solar investigation, the broader renewable energy industry continues to face challenges from regulatory and legislative uncertainty, supply chain disruptions, inflation, rising prices for power purchase agreements and long wait times for grid interconnection, ACORE said.
U.S. wind power installations fell almost 9% in the first quarter, while professional investors pulled back from the wider renewable energy sector.
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