A Canadian ITC
Continuing my conversation from October, I'm returning to focus on Canada. It seems that the Inflation Reduction Act ($370B climate change policy) in the US has catalyzed Canadian incentives once again. Earlier this month, Deputy Prime Minister Chrystia Freeland announced a 30% refundable tax credit for renewable energy, energy storage, heat pumps, and EV vehicles and infrastructure, as well as a 40% incentive for hydrogen projects. This incentive, in conjunction with the Ontario energy storage procurement mandate (1,500MW - 2,500MW) released in October and the Alberta Clean Electricity project (30% renewable generation by 2030), helps build a very positive outlook for clean energy in Canada! And this perspective is coupled with the national milestone of having 5GW of installed solar capacity. Canada now produces 80% of its energy from power sources other than oil! With 40% of EnergeiaWorks staff based in Canada, we offer direct insight into this market and certainly welcome you to reach out to us to discuss your recruitment strategy.
Can the US Clear Up Industry Problems?
2022 has not been a great year for solar and wind energy installations. Through the first two quarters of 2022, commercial solar is down 40% from 2021, wind installations dropped by 78% in Q2-2022, and utility-scale installations were down 25% in Q2-2022. The rising cost of labor, limited supply and rising price of materials, major shipping problems, interconnection delays, and the uncertainty of import tax has led to project delays and cancellations throughout the US. We have money to spend with the IRA, but we need to clear up these industry issues if we want substantial growth in 2023! But I'm optimistic, so let's get to work ...
However, this update is not all doom and gloom. Residential solar just had its 5th consecutive growth quarter and will close 2022 with an installation record of 5.6GW. The energy storage industry is also crushing it! Storage installations in the first three quarters of 2022 have already equaled the installed capacity from 2021.
Will Domestic Manufacturing Solve Work?
The IRA is becoming a major catalyst for US based manufacturing. This alone could catapult the solar industry past the problems with shipping and manufacturing in Southeast Asia. Since the IRA has been signed, Kore Power announced a lithium-ion cell production line in Arizona. First Solar announced a $1.1B thin-film module line in northern Alabama. Enphase plans to open 4-6 microinverter lines in 2023. Heliene is opening a 400MW line in Minnesota, SPI Energy a 1.5GW wafer line in 2023, and Q-Cells a 1.4GW line in Georgia. These manufacturing facilities, along with Power Electronics in Arizona or Texas, SolarEdge (site to be determined), and MeyerBerger in Arizona, mark tremendous development in domestic production. Then, probably the biggest announcement, Enel is opening a line to produce 3GW of bifacial modules and cells. But you get the picture! Project developers and EPCs will pay a premium in the short-term to eliminate the issues they've been having in 2022. Over time, and with the IRA incentives, there will be price parity with the Asian manufacturers. Here at EnergeiaWorks, we're already having conversations with manufacturers about their expansion plans for 2023. The majority of our current workload supports project development, operations, engineering, construction, and asset management, but look for this switch next year as we onboard more domestic manufacturing customers.
Connect with Team EW Today
If you are currently exploring a new job in your renewable energy career, we invite you to have a look at our careers portal. If you're looking to hire top talent in manufacturing, project development, finance, construction, operations, or energy asset management professionals, reach out to us today.