Why The Solar Power Industry May Succumb To Total Collapse
The solar panel industry may be the key to a sustainable future, however, before that happens it could collapse entirely.
This article is more than 2 years old
The fastest-growing energy source in the United States is solar energy which is quite possibly the best solution for achieving climate goals and offsetting the challenges of inflated costs of fuel and limited supplies of fossil fuels. The solar power industry provides energy from the sun which is meant to help strengthen the economy by not having to rely on imports of crude oil from other overseas counties. However, the solar panel industry as a whole may be on the brink of a total collapse.
According to CNN Business, The US Department of Energy has reported that solar energy has the potential to power up to 40% of the entire nation’s electricity by the year 2035. The solar panel industry in this capacity would also employ as many as 1.5 million people to maintain operations. That is great, but in order to meet the nation’s clean energy goals, the United States is going to have to develop a streamlined manufacturing process to produce solar energy panels and their necessary components. This could certainly be possible if the US manufacturers started to receive financial incentives that would offset the high production costs, which have spiked 30% to 40% more than the costs associated with imported energy sources. Although, as of now, none of that is happening.
To make matters worse, in the first quarter of this year the US Department of Commerce opened an investigation to research if the 4 countries that are supplying the United States with solar panels have been using components necessary for the solar panel industry that are made in China. If the US Department of Commerce finds that Cambodia, Thailand, Vietnam, or Malaysia are using these made-in-China components, they would be subjected to US tariffs. This means the solar panel industry would take a financial hit from retroactive tariffs which means the costs associated with solar power energy would become far more expensive.
Not great news for the solar panel industry which has already been operating in a state of panic with fears this pending investigation by the US Department of Commerce could cause the industry to collapse. The Solar Energy Industries Association has already reported that a whopping 83% of companies in the US that purchase or use solar panels are expecting a storm of consumer cancellations due to the current delays in receiving the product and part replacements needed to support the sales within the solar panel industry. With all but 20% of solar panels installed in the United States being imported from one of the four countries under current investigation, this opens a vulnerable spot for continued disruptions for essential energy products needed to transition to a clean energy state which can be provided from the solar panel industry.
The House has passed a ‘Build Back Better’ bill that is helping Congress to move in a forward motion by expanding and extending the current investment tax credits, along with a production tax credit to encourage production and sales within the solar panel industry. These purposed tax credits would lessen the overall costs associated with the production of solar panels and help add capacity to current solar power product manufacturers.
