See below for the March 2023 edition of the Sol SOURCE. Make sure to sign up to receive future editions as they release.
The Sol SOURCE – March 2023
The Sol SOURCE – March 2023
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After the Inflation Reduction Act: Solar’s New Horizon
After the Inflation Reduction Act: Solar’s New Horizon
Insights |
This article is part of the March 2023 edition of our publication The Sol SOURCE. Click here to read the full publication.
After the excitement that followed passage of the Inflation Reduction Act (IRA), reality is setting back in as we await implementation guidance from the Biden Administration. However, clean energy isn’t the federal government’s only focus—2021’s Infrastructure Investment and Jobs Act (IIJA) has started to take effect, not to mention the continued war in Ukraine, increasing trade and tensions with China, and a tumultuous U.S. economy made even rockier by the recent collapse of Silicon Valley Bank and ongoing uncertainty about the debt ceiling. Analysts, investors, and state governments are setting new expectations for clean energy deployment as we all dig deeper into the challenges and opportunities ahead.
New Law, New Projections
The IRA’s effect on solar growth projections is unmistakable. The Solar Energy Industries Association (SEIA) projects a 69% increase in solar deployment over the next 10 years, which would lead to five times more solar in the ground. 85 GW of new solar manufacturing capacity have been announced since the IRA was signed—an 870% increase. With annual overall investment in renewables set to increase from $64 billion in 2022 to $116 billion in 2031, the U.S. is now projected to cut its economy-wide emissions by more than 50% by 2030.
The End of the Solar Coaster
The unprecedented scale of these projections is largely driven by the new longevity of federal clean energy tax credits under the IRA. For the first time, the ITC and PTC will persist at full value for 10 years—or longer, if emissions from generation aren’t reduced by at least 75% in that time. The longer horizon is intended to encourage sustained investment in clean energy, instead of the too‑familiar boom-and-bust cycles brought on by periodic one- and two-year extensions. Under the IRA, the credits also transition quickly to technology-neutral clean energy credits, aligning with scientists’ and policymakers’ focus on emissions outcomes rather than technological inputs.
States Step Up
While we await federal guidance for implementing novel portions of the new law, state governments are stepping up to make the most of this moment. Encouraged by the new federal attention on clean energy that we saw in 2022, a number of states have passed or are studying 100% clean electricity commitments. As we highlight in our State Markets section, since the IRA was signed, Minnesota and New Jersey have made fresh commitments to 100% clean electricity, marking the first time that more than half of Americans live in jurisdictions that have made this commitment. States are also looking ahead at how they can leverage a clean electricity supply to decarbonize other sectors, such as transportation and building operations. The IRA and IIJA’s significant investment in these harder-to-decarbonize sectors is largely funded through states, making their role particularly important.
New Challenges
Portions of the IRA’s larger and longer-lasting tax credits rely on further federal guidance for their implementation. Because of the limits of the budget reconciliation process under which the IRA was passed, the law itself could not include the specific instructions needed for implementing its novel credit adders and financing options. Rules and definitions related to domestic content, energy communities, credit transferability, and direct pay are left to the IRS and other federal agencies to develop before the credits can be monetized. For example, the IRA incentivizes building clean energy infrastructure in “energy communities,” defined by their proximity to Superfund sites or recently closed coal facilities, or by lost fossil fuel employment. Each of these criteria requires additional information from the IRS to be actionable—defining census tracts, proximity rules, and so forth.
Another key hurdle to fulfilling the promise of the IRA is a challenge facing many industries in 2023—finding enough workers. According to some estimates, more than 100,000 new clean energy jobs have been created in the six months since the IRA took effect. At the same time, the U.S. construction industry was short 413,000 workers as of December, while 764,000 manufacturing sector jobs remained open, according to the Bureau of Labor Statistics. McKinsey & Company expects a further 550,000 new energy transition jobs by 2030, of which they estimate only up to 10% will be filled by workers leaving the oil and gas industry. Even with the significant support the IRA provides for apprenticeships, this issue remains potentially the most important challenge to achieving the full value of the IRA over the long term.
What Else Is Going on in Solar?
Setting aside the IRA, familiar policy topics remain in focus for the industry. International trade issues are still an important concern, including tariff policy and complications from our ever-evolving relationship with the People’s Republic of China. In the near term, we expect a final determination on the AD/CVD investigation by May 1, 2023, which will establish tariff rates for a substantial portion of solar panel imports. President Biden (D) stayed the effect of this decision through June 2024, although Congress is now considering overturning that critical near-term tariff relief and imposing retroactive tariffs, which would debilitate the industry. Purchasing decisions already stretch past the end of the tariff relief, and we look forward to better pricing certainty as we onshore manufacturing capacity. As we write this, solar panel imports have begun to unstick from the logjam that followed the Uyghur Forced Labor Prevention Act. Trina Solar, for example, noted that more than 900 MW of panels have cleared customs recently with less than one percent detained. This is a significant improvement from the effective freeze we saw after the law took effect last year.
Domestic challenges also remain. At the forefront are ever-worsening interconnection processes, which are hampering many regions’ efforts to connect new renewable generation. In PJM, which serves 14 jurisdictions from Pennsylvania to North Carolina to Illinois, grid operators worry that interconnection uncertainties may threaten future reliability. In the near term, the ongoing threats of federal default and bank insolvencies hang over investors and developers alike as the U.S. approaches the federal debt limit, currently estimated to be reached as soon as June. At the local level, an Astroturf campaign threatens to impose overly restrictive siting requirements for solar—if not outright bans—in many counties. Meanwhile, the State of Illinois recently passed a national model for streamlining siting requirements across geographies and technologies.
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Exploring Agrivoltaics: Solar Design and Lettuce Yield in Fresno, California
Exploring Agrivoltaics: Solar Design and Lettuce Yield in Fresno, California
Insights |
This article is part of the March 2023 edition of our publication The Sol SOURCE. Click here to read the full publication.
The agricultural and solar industries sometimes compete for land use, but they have recently found ways to work together. Agrivoltaics is the use of land below solar panels for crop fields, allowing a site to produce both food and energy. To better understand how these dual uses interact, we researched how yields for lettuce, a cash crop that can produce in shaded conditions, might benefit from changes to solar panel configuration at a projected growing site near Fresno, California. We found that some configurations are well suited to both agricultural productivity and project returns.
Research Methods
Our team evaluated four system configurations:
- a fixed ground-mounted system with one-meter ground clearance;
- a fixed elevated system with 3.75-meter ground clearance;
- a single-axis tracking ground-mounted system with one-meter ground clearance; and
- a single-axis tracking elevated system with 3.75-meter ground clearance.
We measured the effect on lettuce yield of adjustments to ground-clearance height, array height, axis selection, tilt, tracking rotation limit, and backtracking.
Row spacing was set to approximately four meters between panels, allowing lettuce positioning between rows to conform to standard 14-inch spacing, including 14 inches from the system’s standard 20-inch-diameter support piling. The yield was measured under normal and drought conditions to monitor crop response to variable moisture retention. Reduced moisture retention in drought conditions results in greater production when panels are positioned over the lettuce, enhancing yield for ground-mounted panels and elevated arrays.
Using all input parameters, we created 25 plots of subarrays containing 20 rows per subarray and 16 modules per row, occupying a total of seven acres of land. Differences in assumed yield were calculated based on average photosynthesis. System costs were adjusted to reflect increased labor and materials costs of elevating panels on stilts and installing trackers.
Results and Conclusion
Total lettuce output for each system parameter demonstrated that elevating panels is key to increasing lettuce yield. Tracking also increases yield, although to a lesser extent.
The cost-adjusted financial results for each array design showed that the fixed elevated system generated the highest net present value, while the ground-mounted tracking system generated the highest internal rate of return (IRR).The elevated tracking system maximized lettuce yield, generated the highest total income, and generated a greater IRR than both fixed systems. The single-axis tracking array with 3.75-meter ground clearance resulted in the smallest reduction in lettuce yield compared to full-irradiance growing conditions. Importantly, an elevated system design would allow tractors averaging three meters in height to pass under the array, allowing farmers to use typical harvesting techniques. Unelevated ground-mounted systems would require harvesting by hand, necessitating special protective equipment for workers operating near the panels.
Further research into the potential of agrivoltaics is essential to improving land use in the clean-energy economy. More detailed data and citation information are available upon request.
Endnotes
1. Barron-Gafford, Pavao-Zuckerman, Minor, Sutter, Barnett-Moreno, Blackett, Thompson, Dimond, Gerlak, Nabhan, and Macknick (2019), Agrivoltatics provide mutual benefits across the food-energy-water nexus in drylands, Nature Sustainability.
2. Tani, Suguru, Nakashima, and Hayashi (2014), Improvement in lettuce growth by light diffusion under solar panels, Journal of Agricultural Meteorology.
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Infrastructure + Impact Spotlight: Welcome Our New Impact Partners!
Infrastructure + Impact Spotlight: Welcome Our New Impact Partners!
Insights |
This article is part of the March 2023 edition of our publication The Sol SOURCE. Click here to read the full publication.
In 2020, we announced our first power purchase and community investment agreement. The agreement was a milestone in our “Infrastructure + Impact” mission, representing a groundbreaking strategy to leverage clean power generation to invest in under-resourced communities and communities disproportionately harmed by climate change. Under that agreement, Sol Systems is charged to craft community-focused clean energy solutions and support local workforce development by partnering with local organizations that are working to address challenges in their communities.
Today, our initiative has grown from five organizations based in Philadelphia, Baltimore, and Washington, D.C. to 10 organizations serving a variety of rural and urban communities. Like their predecessors in the program, our newest partners are focused on renewable energy, environmental justice, and job creation and training. These partnerships also bring new support to our “Pathway to Solarization” objective, which recognizes the importance of home repairs and energy efficiency upgrades to expanding access to solar, as well as educating and growing the clean energy workforce. Below are a few of the organizations that we have worked with closely over the last year and will continue to work with in the year to come.
Based in Boone, North Carolina, Appalachian Voices envisions an Appalachia with healthy ecosystems and resilient local economies that allow communities to thrive. They work to increase energy efficiency and end harmful fossil-fuel practices (such as mountaintop-removal coal mining), and strive to shift to clean energy sources, including solar and wind power. Sol Systems’ partnership will establish a solar readiness fund. This fund will expand the work of Appalachian Voices’ established solar finance fund, which provides catalytic support to unlock solar investments in coal communities. Specifically, the solar readiness fund targets facilities whose key barrier to solar is poor roof conditions.
Based in Christiansburg, Virginia, Community Housing Partners was founded to perform home repairs for low-income families living in unsafe or unhealthy conditions. As the complexity of home repairs grew, the organization incorporated, received a not-for-profit 501(c)(3) designation and became Virginia’s first provider of federal Weatherization Assistance Program services. Sol Systems’ partnership will support energy efficiency and safety upgrades, improving residents’ quality of life and reducing the energy burden in a low-income apartment community in Pembroke, Virginia.
Based in Washington, D.C., Rebuilding Together DC Alexandria is part of a national network of affiliates working to preserve affordable homeownership, revitalize neighborhoods, and provide critical home-repair services that eliminate health and safety hazards free of charge to those in need. Sol Systems’ partnership will be used to make energy-efficient upgrades to two facilities: an affordable housing facility for homeless veterans and a housing unit for low-income households owned by So Others Might Eat (SOME). SOME is a Washington, D.C. organization and existing partner of Sol Systems working to help break the cycle of poverty and homelessness in the city. SOME is the current beneficiary of a 915 kW community solar installation recently completed for FedEx at a facility in Washington, D.C. FedEx is allotting part of the electricity bill credits generated by the solar installation to offset the yearly electricity costs of two SOME facilities.
Based in Baltimore, Maryland, Climate Access Fund is a green bank whose mission is to reduce the energy burden and carbon footprint of Maryland’s low- and moderate-income (LMI) households by facilitating access to clean community solar projects. Sol Systems’ partnership will support the financing and implementation of a community solar project at the Henderson Hopkins School in East Baltimore, which will reserve 100% of the solar power generated for LMI households in the community. Other community benefits will include solar workforce training and an after-school club for middle school students.
Based in Petersburg, Virginia, Virginia Environmental Justice Collaborative was created when four organizations (the Southeast CARE Coalition, Appalachian Voices, the Federal Policy Office of WE ACT for Environmental Justice, and New Virginia Majority) saw the need for statewide coordination to support Virginia organizations addressing environmental justice issues. Sol Systems’ partnership will support the organization’s efforts to establish a solar-plus-storage resilience hub and launch workforce development initiatives in Petersburg, a historically under-resourced community in Virginia.
In the year ahead, we will continue to foster relationships with our current community partners while expanding our impact with new ones. Our continuing partnerships deepen the impact we have in D.C., Baltimore, and Philadelphia, while our new partners will allow us to expand our work into new geographical areas, specifically rural Appalachia in Virginia and North Carolina.
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