At the beginning of the year, it was reported that there was a 45-GW inventory buildup of solar modules in the United States, which caused prices to be slashed by nearly half in 2023. In addition, there has been a reported backlog of other solar components, such as inverters, and even more recently a plummeting of solar wafer prices and a backlog of solar wafer inventory equal to two to three weeks of production. Three causes for this level of market upheaval that has not been seen in the United States since 2010 include:
- NEM 3.0 in California has put numerous installers out of business, caused solar inventory to lose value in warehouses and decelerated the energy transition, which even at breakneck speeds was not keeping pace with climate goals, much less the needs of the planet.
- Utilities are fighting against NEM rate structures in what seems to be a nationally coordinated effort, while also increasing electric rates.
- High interest rates are making the ROI of solar less attractive.
At the same time, there is some good news and opportunities. The Inflation Reduction Act (IRA) has made billions of dollars available to support the clean energy transition. The Greenhouse Gas Reduction Fund has allocated $27 billion to the cause, with at least 60% focused on disadvantaged communities. The Affordable and Accessible Clean Energy for Disadvantaged Communities section includes $7 billion for the deployment of zero-emission technology, $8 billion for broad investments in reducing greenhouse gas emissions and promoting environmental justice, and $11.97 billion available to all Americans.
Furthering the disbursement of these funds through the Solar for All program, on Earth Day, the Environmental Protection Agency unveiled the 60 recipients of the $7 billion of federal solar grants for residential solar projects serving 900,000+ households in low-income and historically underinvested communities. But with a potential administration change, these funds need to be quickly dispersed so they aren’t at risk.
That’s where another opportunity of corporate tax write offs from donations could interact to provide a solution to the above challenges. In a coordinated effort with organizations like ACORE, ACP, SEPA and SEIA, this federal funding could be quickly leveraged to purchase and install discounted solar products, not only clearing out the current stockpile, but helping federal funds to make an even larger impact on energy justice. There are massive benefits to this private industry and governmental cooperation. Underinvested-in communities gain access to lower-cost solar and benefit from stabilized electricity prices. Manufacturers and distributors can enjoy large tax write-offs from donated or discounted equipment, allowing them to clear their inventory, launch next-generation technology and benefit from a positive brand image. Installers, key to the implementation of the energy transition, can get back to work and be mobilized for future growth. And the government, at both the federal and state levels, moves closer toward achieving their energy justice and climate goals.
There are a lot of moving parts, gaps that still need to be filled, and massive coordination efforts required, but this is one of those rare times where problems can truly become opportunities. If any industry can make lemonade out of lemons, it is the solar industry, which has continually proven its ability to overcome some of the toughest challenges. And energy justice is a worthy goal to do it for.
Jessica Fishman, Director of Renewable Energy at Kiterocket, is a strategic marketing leader with nearly 20 years’ experience, including seven years as head of global public and media relations at inverter maker SolarEdge. Passionate about addressing climate change by accelerating the clean energy transition, she has worked at leading renewables companies, building marketing and communications departments.
