The Biden administration believes the future of solar to be bright (ba-dum-tss), but several questions remain as to the feasibility of its renewable energy vision. On Sep. 8, the Department of Energy released the Solar Futures Study, which in the words of the administration is an illuminating “blueprint for a zero-carbon grid.” If you’re someone concerned about the climate and the domestic energy future, this report should come as a welcome contribution. The report imagines a 2050 in which solar power supplies 40 percent of the nation’s electricity, while employing somewhere in the ballpark of 1.5 million people. This solar expansion would be paired with significant contributions from wind and nuclear energy (and smaller contributions from hydro and geothermal power) to round-out a carbon-free grid.
But the blueprint is missing some crucial components. While the document provides a generalized plan for transitioning the United States to a grid dominated by renewable energy production, including a breakdown of renewables dominated by solar, it is at times sparse on the details for moving forward. One such example is how the report provides little detail as to how the U.S. supply chain will adapt to achieve such an energy mix by 2050. As Washington continues to attempt to find political solutions to the infrastructure debate, keeping supply chain issues in mind would be extremely prudent.
In 2020, solar energy represented just a 2.3 percent share of utility-scale electricity generation. That does represent a significant increase over that last couple of decades (it was less than 0.1 percent in 1990), but it is a far cry from the necessary production to meet the vision of the Solar Futures Study. Therefore, production and installation will have to significantly ramp up to meet the targets outlined in the report.
However, that task is proving more difficult in the wake of the pandemic. A surge in costs for metals, shipping, and freight following pandemic-related supply chain bottlenecks has led to an increase in price for solar manufacturing. Steel, used in both racks for holding solar panels and polysilicon to make panels, has tripled in price alone. That increase in cost is impacting other renewables like wind, too. Now add to that the reality that SolarEdge, a prominent renewables company, said in May 2021 that it had experienced a 100 percent increase in ocean freight costs. All of this equals a price and supply chain future for solar and renewables that is less than certain.
Sure, it’s possible that bringing the pandemic to a manageable state globally could decrease some of these costs, as could returning some manufacturing to the U.S. But it’s not entirely clear how creating a predominantly domestic supply chain would reduce the cost of raw materials necessary. And sure, Biden’s plan is a long-term one at that. However, if the U.S. is really going to pull-off such a massive shift in its energy supply, it can’t wait and lollygag around.
Even in an eventual (or, so we can hope) post-pandemic world, more issues for solar expansion remain. First, a significant amount of the polysilicon needed for solar panels comes from China. That’s currently proving problematic. Given the accusations of China’s use of forced labor in Xinjiang, the White House has currently banned the imports of some materials necessary to make more solar panels. While it is currently rather cheap to produce solar panels, in comparison with a decade ago, increasing the demand for specialized materials and the metals required for solar panel construction paired with diminished supply is driving prices up for the first time in years. As it is, there is already difficulty in just accessing the materials needed to jumpstart production.
That’s not even to get started on the labor front, as there are also disruptions in finding the necessary workers and machinery to build solar panels—and other renewable infrastructure. Not only is there a shortfall of construction labor currently, the number of solar workers actually decreased slightly in 2020—a fact that could prove problematic for the Biden administration in meeting 2035 climate goals and the vision of the Solar Futures Study. Solar industry members have noted a vexing skills gap and a small applicant pool among the competitive job market as key obstacles to growing their workforce. Plus, overall costs for solar panel construction, including things like labor, are up 12 percent in 2021. To reach the goals of the report, the solar industry would need to rush to train tens of thousands of new workers. Renewables have also faced installation issues due to machinery availability, as competition for equipment like cranes has led to shortages in their supply. This not only increases costs but lengthens the timeline for installations.
Beyond that, the Solar Futures Study plan requires the installation of a smart grid. The smart grid requires two-way communication between generators, transmitters and customers on the grid. The smart part requires network-based communication across the grid. Which while important in both theory and practice, still opens significant questions as to how the government will manage the security of the supply chain itself. The issue isn’t just building energy infrastructure, but also protecting it. Adding thousands of new internet-capable devices provides thousands of new entry points for hackers and bad actors intending to gain access to or destroy the capabilities of the grid. As the U.S. Resilience Project framed it, “Supply chain cybersecurity problems stem from the risk that compromised or counterfeit components could enter the chain from lower tiers, which are less visible to the utilities.” Therefore, a smart grid necessitates collaboration between the federal government, grid operators, and manufacturers to ensure the safety of the new grid at all times.
None of this is to say that Biden’s plan is misguided or impossible. Or that solar isn’t part of the solution—it clearly is part of the path forward. As Michelle Davis, an analyst at energy research and consulting firm Wood Mackenzie, pointed out to the New York Times: “No matter how you slice it, you need solar deployments to double or quadruple in the near term” for the Biden administration to achieve its climate goals. The truth is that solar and other renewables remain a relatively cheap energy option that demand increased use (especially given the rising impacts of fossil fuel extraction and combustion), but governmental reports and climate scientists haven’t always been great at predicting the changes in their price.
So, when thinking about the looming infrastructure deals in Congress and the mission to increase renewables, political commitment, funding and will aren’t the only obstacles to overcome. Just because prices have decreased for renewables over the last decade to a point where the DOE sees a viable solar future doesn’t mean they’ll stay that way. A massive increase in demand for renewable technology must be paired with a serious consideration and overhaul of our national supply chain.