RE+ 2024: Our 7 biggest takeaways
Insights on domestic manufacturing, distributed solar and large loads from one of North America’s largest clean energy events
4 minute read
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Held this year in Anaheim, California from 9-12 September, RE+ is a major event in the clean energy calendar. A full cohort of Wood Mackenzie analysts across power, solar and storage attended this year’s conference, making the most of the opportunity to engage with industry insiders and check the pulse of the sector.
In our insight ‘Reflections from RE+ 2024’, our experts share their key findings from the event.
Fill out the form at the top of the page to download the full report – or read on for a brief summary of the top takeaways:
1. US-made inverters are coming, but not all OEMs see the value of onshoring
Many leading US photovoltaic (PV) inverter vendors are venturing into domestic production, with our recent global solar PV inverter state of the market report showing 5 gigawatts (GW) of capacity already operational and an additional 30 GW announced. The decision to build in the US is driven by subsidies in the Inflation Reduction Act (IRA): specifically, the 45x Advanced Manufacturing Production Tax Credit (a dollars-per-kilowatt-hour subsidy available to domestic manufacturers) and the 10% domestic content bonus available in relation to the Investment Tax Credit (ITC) and Production Tax Credit (PTC). The biggest beneficiaries are set to be module-level power electronics (MLPE) manufacturers, whose US-made inverters will be cheaper than imported inverters once these subsidies are taken into account. Leading European and Japanese original equipment manufacturers (OEMs) are planning US production, but Chinese manufacturers see less value in onshoring.
2. Domestic content solar modules will come at a high premium
The first crystalline silicon modules meeting the requirements for the IRA’s domestic content will be available soon. However, higher manufacturing costs and strong demand are set to be reflected in prices. Buyers stated that quotes for modules made with domestically produced cells indicated a price above 45 cents per watt (c/W). Similar modules destined for the distributed solar market made in the US using imported cells cost buyers around 35-36 c/W, so that represents a significant premium. As a result, most US module manufacturers are likely to rely on imported cells for the foreseeable future.
3. Supply of domestic battery modules will hinge on election outcomes
Interest from developers has led certain battery energy storage system (BESS) integrators to announce plans for domestic content battery solutions. By 2026, we expect US-made BESS to be 8% cheaper than Chinese-made BESS, once all subsidies and tariffs are taken into account (data from this recent insight from Wood Mackenzie’s storage team). However, the upcoming presidential elections are creating uncertainty around the aforementioned 45x tax credits, as well as future US-China tariffs and even the IRA itself. As a result, we expect little progress in establishing a domestic supply chain before the new year.
4. The domestic content adder remains the focus for residential solar players
With residential solar demand weak, many installers and lenders expect zero growth this year. Third-party ownership (TPO) providers were more optimistic, helped by the fact that much of the residential solar sector is laser-focused on the ITC’s domestic content adder – for which only TPO projects are eligible. However, despite some industry players making bold statements, uncertainty remains about qualifying for the adder and how (or if) many financiers will pass on the benefits to installer partners.
5. Residential installers have concerns over consumer protection
The recent bankruptcies of ADT, Titan Solar Power, SunPower, and Lumio raise questions not only regarding orphaned systems but also about problematic sales strategies. While many installers were familiar with the verification platform ‘Recheck’, it remains to be seen if it can bring transparency and accountability to the sales process. Potential customer satisfaction issues in the wake of the surge in battery storage installations under the new Net Billing Tariff (NBT) in California were also a concern for some.
6. Project lead times for non-residential solar have increased
Long recognised as a thorny issue for large projects in specific regions, interconnection delays have now become a sector-wide and country-wide pandemic, severely impacting project timescales. Several developers reported development times for projects doubling – a claim supported by our own analysis. Developers are also increasingly having to contend with local opposition and strict local and state-level permitting laws, leading to higher costs, longer timelines, and even cancelled projects.
7. Large load interconnection is a major issue
Our latest analysis (as part of Wood Mackenzie’s North America Power Strategic Planning Outlook) shows that for the first time in decades the US can expect a major increase in load, with more than 25 GW of new large-load demand expected through 2030. New demand from data centres and industrial facilities offers potential upside for generators. However, most utilities and Independent System Operators (ISOs) who operate US grids are unsure how to efficiently manage the resulting volumes of load interconnection requests and the potential network upgrades required. Sourcing sufficient generation is also an issue, with some utilities announcing delays to fossil fuel retirements to serve the increased load.
Learn more
Don’t forget to fill out the form at the top of the page and download your complimentary copy of the full report, which explores these themes in more detail and includes links to a range of articles on the individual topics.