The American Clean Power Association (ACP) recently released two market reports revealing insights into the state of the clean power industry in the United States. The reports highlighted that in 2022, the combined capacity of wind, utility solar, and energy storage installations reached over 25 GW, making it the third-largest year on record.
Despite this accomplishment, the ACP acknowledged a decline in deployment volume compared to the previous two years, and the first quarter of 2023 experienced historically low installation levels. These observations underscored the ongoing challenges faced by the industry.
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In 2022, clean power sources dominated new power capacity additions, accounting for nearly 80% of all new grid additions. This remarkable progress was attributed, in part, to the Inflation Reduction Act (IRA) passed the previous summer. The IRA spurred increased activity in the clean power sector, resulting in a development pipeline of nearly 140 GW by the end of the first quarter of 2023, representing an 11% growth compared to the previous year.
While the ACP acknowledged the growth in clean power activity, they cautioned that it is still too early to observe a corresponding increase in actual installations. For the first time since 2017, the installation rate showed signs of slowing down.
Jason Grumet, CEO of the ACP, emphasized the importance of supportive measures from Congress and Governors to facilitate the construction of new energy facilities and the development of transmission infrastructure required for delivering clean power to the public.
In an effort to strengthen clean energy policies, three national renewable energy organizations—the American Council on Renewable Energy, Advanced Energy United, and the Solar Energy Industries Association—sent a joint letter to House and Senate leadership, urging the enactment of bipartisan transmission permitting legislation. The organizations emphasized the need to accelerate the deployment of transmission infrastructure to maximize the carbon emission reduction benefits outlined in the IRA.
Regarding specific state achievements, Texas stood out by adding twice as much clean energy capacity as any other state in 2022, solidifying its position as the state with the highest operating clean power capacity, amounting to nearly 55 GW. Additionally, Iowa and South Dakota generated over 50% of their electricity from clean power sources during the same period.
Energy storage experienced a record-breaking year in 2022, with commissioned capacity reaching 4 GW and 12 GWh, signifying an 80% increase in total operating storage capacity. Hybrid project installations also set a new record, with a 60% increase compared to the previous year, totaling almost 6 GW.
In terms of the clean power development pipeline, solar accounted for 59% of all clean power capacity, followed by land-based wind at 15%, battery storage at 14%, and offshore wind at 13%, within the nearly 140 GW capacity in the pipeline.
Despite these positive achievements, the growth trajectory of U.S. clean power was unable to continue in 2022. The ACP reported a decline in combined installation volume for the first time in five years, with the first quarter of 2023 showing the lowest installation levels in three years.
The slowdown in deployment was attributed to various factors, including delays affecting more than 50 GW of projects in late-stage development. By the end of the first quarter, a total of 63.3 GW of projects experienced delays, with average delays of six months or longer. Unclear permitting timelines, trade policy uncertainty, transmission shortages, difficulties in sourcing solar panels, unresolved IRA implementation, and challenges with interconnection queues were identified as contributing factors to the deployment slowdown.
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The ACP stressed the need to address these challenges to unlock the full potential of the nearly 140 GW of clean energy currently in the development pipeline.
In the first quarter, clean power installations experienced a significant 36% drop (4,079 MW) compared to the same
period in the previous year. Solar installations faced considerable delays, with 7.3 GW of capacity that was expected online during the first quarter remaining stalled. Nevertheless, it is anticipated that around 90% of the delayed capacity additions from the first quarter will come online later in 2023.
Furthermore, the ACP highlighted that new Power Purchase Agreement announcements decreased by 24% to 3.8 GW, with corporate buyers leading the way, accounting for 63% of the announced capacity.
