27 July 2022
Joss Mercer By Joss Mercer

Are These Three Challenges Stifling the Solar Industry?

Post-pandemic, there are an increasing number of challenges facing the renewable energy construction industry, in particular the solar sector. Global supply chains affected by travel restrictions, EU changes, increasing manufacturer costs, and workforce changes have all had a dramatic effect on the landscape of the solar industry.

Within this space of change, start-ups and leading companies alike are finding ways to adapt and grow amidst various difficulties. Innovation, collaboration, and integrity are at the heart of these movements. We’ll explore some of the leading innovators in the industry, and see how we might overcome our current challenges in the solar industry. Let’s take a look.

How Can We Overcome Our Industry Challenges?

Tackling Import Tariffs & Supply Chain Issues.

An increase in import tariffs over recent years has created particularly strong issues within the industry, driving up costs for American manufacturers who are then facing pricing wars from foreign suppliers. Some are raising concerns that the threat alone of tariffs on the industry’s growth trajectory could lead to a 19% decline across the sector in near-term solar forecasts, particularly with so much competition from those able to exploit stateside tariffs.

Chinese and Southeast Asian countries currently dominate the market in supplying the essential components or large-scale solar farms - including PV modules - with at least 80% of US panels coming from Asia. With their near-monopoly within the industry and their ability to heavily undercut market costings, frustrations have been growing. Californian-based Auxin Solar, for one, have sparked petitions blaming Chinese manufacturers for unfairly undercutting American manufacturers by circumventing stateside tariffs and duties and allegations of backdoor dumping. Should the consequential investigations by the US Department of Commerce prove circumvention laws have been broken, a tariff rate of up to  250% could be imposed. Whilst this would hopefully see a halt to unfair practices, it could also create great job losses across competing countries, seeing even further increased scarcity in solar components.

A temporary pause on import tariffs has been introduced, and previous tariffs designed to increase domestic production and minimise reliance on Asian development could offer cause for optimism in the American industry - yet many are still sceptical and concerned of their future stability.

The most workable fix at this point would appear to be a grants system for US manufacturers to allow them to continue buying exports from Asia to support their in-country production, whilst mitigating the financial hit of import taxes and competitor pricing. In doing so, we can recognise that which cannot be halted, yet find a means of working that benefits the industry as a whole.

Where some companies are kicking back fiercely towards industry competitors overseas, others are embracing a necessary collaboration and growing strongly because of it. Pattern Energy Group is American-owned, with established operations in the United States, Canada, and Japan. Working globally, Pattern Energy have generated over 15GW across its portfolio, created over 10,000 jobs, and completed over 500 solar projects through its affiliate, Solect Energy. Their success is due to their expertise, passion, and - markedly - their collaborative spirit, working with communities internationally with respect and integrity for their individual needs. Expanding working operations has allowed them to truly flourish, reach more people, and succeed in delivering a much greater wealth of successful projects.

Navigating Workforce Shortages.

Alongside tariff strains, severe shortages across the industry’s workforce are taking their toll. As the US solar industry grows exponentially, with 1 in 50 new jobs being in the sector, approximately 400,00 new solar workers will be needed by 2045. As a national target to reach a carbon pollution-free power sector by 2035 governs advances across the industry, demand for workers will only increase. With an additional increase in costings, supply chain issues, and projects slowly nationally, a further shortage in skilled staff could spell grave concerns for those working across the solar industry.

However, innovative solutions are available. The Build Back Better Act promises to offer $555 billion worth of measures to support clean energy efforts, namely £320 billion available for tax credits for electric vehicles and clean energy, which would see a huge boost in focus on renewable energy and planet-safe transportation. This support would add great incentives for new workers to join the sector, either in solar industry or battery storage.

Tackling the challenges of these shortages head-on, Wanzek Construction places recruitment and staff retention as a top priority. The Wanzek culture is proudly centered around 7 beliefs - Protect, Quality, Talent, Information, Integrity, Communication, and Profit - with a strong focus on community and communication. To transfer these strategic aims into tangible, daily actions amongst their workforce, they’ve embedded their R4 practice into every working site. R4 asks all employees to Recognise, Recommend, Reinforce, and Review their practices, trajectories, and working environment to help continuously support their workforce and retain the best talent, joining weekly meetings and working teams.

Exploring Battery Storage.

Whilst solar has become a well-established renewable source and is certainly taking the lead within the industry, it is unable to develop further without effective battery storage. Battery storage is essential to capturing and retaining solar-generated power and extending the capability of solar power beyond daylight hours.

The challenge to battery storage comes in finding affordable ways to produce and maintain storage systems and making them widely available for all forms of solar power devices with ease of integration. Without this central element, the U.S power grid will not be able to make a full transfer to solar power - with focus and development on battery storage, however, we can see a future truly powered by solar energy.

Many companies are making great strides in including battery storage in their solar power offer to great success. Cypress Creek Renewables is a leader in the industry, offering fully integrated solar and storage, alongside comprehensive operations and management services and asset management. Their solar portfolio is one of the largest in the country, with 2GW spanning over 14 states - and they only look set to grow further.

Meanwhile, 8minute Solar showcases a remarkable portfolio of integrated, intelligent solar power solutions for the modern grid. Combining solar power with smart storage solutions with a focus on reliability, efficiency, and low cost, they are taking a stronghold in the industry.

In fact, 8minute manages one of the largest portfolios of projects developing in America, with 18GW of solar generation and 24GWh of energy storage across Texas, California, and the Southwest. Their portfolio includes Eland Solar and Storage Center - the largest project in the nation - currently providing 7% of L.A’s annual electricity needs, with capacity for up to 60% during summer months.

Thriving Through Solar Industry Changes.

From workforce shortages, and a need for storage development, to a continued battle against tariffs and international supply chain issues, there are many challenges facing the solar industry as we emerge from the pandemic. However, innovative efforts, collaboration, and a faithful commitment to a shared goal can ensure companies - large and small - can continue to thrive and meet the needs of today, and tomorrow.

Fancy discussing the future of construction, in solar or the wider industry, in some more detail? Let's chat! Drop me a message at joss.mercer@industrial-cm.com or connect with me on LinkedIn.

Want to collaborate with us?

Charlton Morris is a Talent Solutions business who offer search, contract, volume and employer branding solutions to the industrial markets.

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Joss Mercer

Joss Mercer is a Business Consultant specialising in the Life Science and Renewable Energy Construction market. Joss has a real interest in the way these types of facilities are built from the ground up. His solution driven and collaborative approach to his search process helps his clients find the best candidates.

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