Why the American clean energy industry is stuck
Two years ago, clean energy enthusiasts were right to feel optimistic. In the decade to 2020, the levelized cost of electricity, which takes into account investment in equipment, construction, financing and maintenance, fell by 69% for onshore wind and 85% for solar projects, according to consulting firm Lazard. With renewables technologically mature and economically competitive, utilities and developers planned to invest in solar and wind power. NextEra Energy, the giant utility that briefly overtook ExxonMobil in 2020 to become America's most valuable energy firm, said it would spend up to $14 billion a year on capital projects in 2021 and 2022, calling it "the best renewable energy development environment in our history." In a difficult effort to decarbonize America's economy, creating clean energy would be the easy part.
As it turns out, it isn't. Some of the problems stem from the pandemic and tangled global supply chains. Expensive commodities helped level the cost of wind and solar energy in the second half of 2021 (though more slowly than coal and gas). But many of the current woes are political in nature. Take restrictions on products from Xinjiang. Last year, Mr. Biden, seeking to limit imports made by forced labor, announced a ban on polysilicon from large companies producing in the Chinese region. U.S. importers struggled to provide evidence that they were not violating the ban. As customs officials studied the suppliers' lengthy certifications, Chinese-language solar modules languished in the ports. The shortage of equipment forced developers to postpone construction.
