Why 2022 will be a Breakthrough for Solar and Wind Industries
According to a new report from S&P Global Market Intelligence, government incentives and private-sector demand are driving solar and wind growth in the United States to unimaginable heights in 2022. The energy transition in the United States will continue at a rapid pace into 2022, with record-breaking volumes of wind and solar generation projected to come online.
According to the report, in addition to supporting regulations these records will be the outcome of utilities and energy stakeholders developing innovative ways to finance renewables deployments and optimize infrastructure management.
“According to forecasts by the research group, 44 gigawatts of utility-scale solar TAN, -0.25 percent, and 27 gigawatts of wind FAN, -0.72 percent is expected to come online next year. Solar capacity is expected to nearly double 2021’s estimated 23 gigawatts of new capacity. Regarding wind, anticipated totals in 2022 would exceed the existing annual record of 16 gigawatts recorded in 2020.”
“It’s going to be a record year for renewable energy development in the U.S. in 2022, with 44 GW of solar and 27 GW of wind power set to be installed alongside more than 8 GW of battery storage,” explains Richard Sansom, head of commodities research at S&P Global Market Intelligence.
Energy storage, which is crucial for wind and solar, is also on the upswing. According to the forecast by S&P, 8 gigawatts of storage will be installed in 2022. This is a six times increase over the previous record, achieved in 2020.
Dedicated programmes such as virtual power purchase agreements and green tariffs will promote the proliferation of wind, solar, and storage. With 29 GW of coal plant retirements scheduled from 2020 to 2025, utilities and state regulators will confront challenges as a result of early plant retirement expenses as a result of the energy shift.
Utility capital expenditures in the United States are expected to continue to rise, with investments in upgrading and modernizing the country’s outdated energy and water infrastructure approaching $63 billion and utility renewables spending exceeding $14 billion in 2022.
S&P also observed an increase in demand from corporations. Switching to renewable energy is often one of the first and simplest way actions for organizations targeted at reducing emissions.
It is Just the Beginning
“If the current administration is successful in putting the U.S. on a path to 100% decarbonization of the energy sector by 2035, these record-setting projections are just the beginning,” S&P Global said of its 2022 estimates.
The surge in wind and solar power generation is being fueled by a number of factors. These include the Biden administration’s role in a global drive toward renewables to accomplish emissions-reduction promises.
By 2035, the Biden administration needs a carbon-free power industry. The president has stated that he wants the United States to halve its emissions by the end of the decade and reach net zero emissions by 2050. This is a target that is shared by much of the industrialized world and speedier than China’s 2060 vow.
Due to the impact of the COVID-19 pandemic on the US economy, state-authorized electric, gas, and water utility ROEs dropped to their lowest levels on record in 2020. Despite the possibility of soaring interest rates and inflation, the levels are expected to continue in the year 2022.