REGION — Several factors in California, including supply chain delays related to a federal investigation into tariffs and a pending ruling on net-energy metering, have slowed down the solar industry, according to state and local experts.
While the recent supply chain issues have largely affected smaller solar businesses, larger firms such as Sunrun, one of the biggest solar companies in the U.S., are starting to feel the impacts from the U.S. Department of Commerce’s investigation, which temporarily halted hundreds of large-scale solar power projects, per media reports.
The federal inquiry, which started March 28, is looking into whether Chinese solar panel producers avoided paying U.S. import tariffs on crystalline silicon photovoltaic cells by using cut-out companies in Cambodia, Malaysia, Thailand and Vietnam.
The ongoing investigation has caused significant delays in the supply chain from Asia, prompting the Solar Energy Industries Association to request U.S. Energy Secretary Jennifer Granholm abandon the investigation altogether.
According to SEIA analysis, “a total of 318 projects accounting for 51 gigawatts of solar capacity and 6 GWh of attached battery storage are being cancelled or delayed,” with $7.4 billion of private investment at risk in in California.
And it’s not just lost money the solar industry is worried about.
The missed solar deployments due to imposed tariffs will cause the U.S. “to emit an additional 364 million metric tons of carbon by 2035,” per a SEIA release.
The solar industry is in a delicate state with a federal investigation exacerbating supply chain issues. Photo by Steve Puterski
“If tariffs are imposed, in the blink of an eye we’re going to lose 100,000 American solar workers and any hope of reaching the President’s clean energy goals,” said SEIA president and CEO Abigail Ross Hopper in a statement. “This would be a monumental loss for our nation, which has the potential to lead our clean energy future, with the right policies. Instead, the Commerce Department is on track to wipe out nearly half of all solar jobs and force a surrender on the President’s climate goals.”
Local solar projects
In unincorporated San Diego County, the Board of Supervisors last year approved a 90 MW solar farm in Jacumba, which is expected to be operational by 2023. Despite the solar industry all but grinding to a halt, the project owner, BayWa r.e., a U.S. utility-scale developer, told The Coast News it does not expect delays to the project.
“At BayWa r.e., we support fair trade practices, supply chain transparency and a strong U.S. manufacturing base, and the route to achieving that here at home is through a strong and healthy U.S. solar industry propelled by clean energy legislation, not punitive tariffs that will hurt the entire U.S. solar sector,” said Geoff Fallon, chief operating officer of BayWa r.e. Solar Projects. “We are joining efforts with our industry peers to urge for a prompt conclusion to the investigation, dismissal of this meritless case and to shift our focus back to continuing to grow the American solar industry.
“Regarding your questions on the Jacumba project, the (Department of Commerce) investigation has certainly added new uncertainty to the project. However, we are currently working through the construction permitting process for the Jacumba project and expect to begin grading toward the end of 2022. With installation of the solar modules scheduled to begin in 2023, this project still has time to evaluate any impacts due to the … investigation.”
Net-energy metering reform
After months of back and forth, the California Public Utilities Commission is expected to overhaul the net-energy metering (NEM) program — a credit-based payment system initiated 26 years earlier to encourage customers to adopt rooftop solar — has many industry professionals on edge.
The NEM program requires investor-owned utilities to pay solar customers for extra energy their panels deliver to the power grid. In 2013, Assembly Bill 327 required the state utility commission to reform the NEM program.
Despite some NEM reforms in 2016, critics have continued to push for further reform of the NEM system, citing an unfair cost shift onto homeowners and renters without solar panels, who are paying $3 billion more per year than those with solar panels.
On the other side, solar advocates have claimed further NEM reform efforts will kill the industry, hurt businesses and add costs to homeowners.
Regardless, CPUC has confirmed change is coming to the NEM program, which has only fueled uneasiness and skepticism across the industry.
“On top of (the federal investigation), is the issue of the state, especially with the fight over rooftop solar, which is much worse,” said Cecilia Aguillon, of Aguillon Enterprises and former board member of the California Solar and Storage Association. “You have that layer and it’s big. It’s making product costs much higher. And of course, you have inflation.”
Scott Sarem, vice president of multifamily at Sunrun who also helps install large projects for low-income residents, said he’s discovered low-income ratepayers haven’t received energy credits through the Solar on Multifamily Affordable Housing (SOMAH) and Multifamily Affordable Solar Housing programs.
In some cases, residents have missed $40 to $50 per month in solar credits, Sarem said, which causes him to question talking points from state officials and the Biden Administration regarding the importance of expanding solar energy to help meet ambitious climate goals.
“A lot of the action doesn’t support the rhetoric,” Sarem said. “It doesn’t take someone in the industry to scratch their head and ask, ‘If you are trying to hit these particular goals, why are you making it more difficult?’”
Paul Cleary, executive director of GRID Alternatives San Diego, and works to install solar in low-income neighborhoods, said the supply chain has been a problem for more than one year. Now, the investigation and CPUC issues have made things more challenging.
“The commerce case just immediately … prices started going up,” Cleary said. “From one day to the next, there was just a really big change.”