Vt. regulators are giving solar developers an extra year to deal with COVID supply chain issues
State regulators last month gave every solar developer in Vermont extra time to finish their projects.
It was an acknowledgement by the Public Utility Commission that supply chain issues, labor shortages, and historic price increases have all made it harder for developers to meet deadlines set in their state permits.
“We’ve had a more-than-six-month delay due to supply chain issues,” said SunCommon co-president James Moore as he stood on the roof of a solar project in Milton. “It’s kind of a wild world out there in everything procurement.”
The project was permitted last year, and it was supposed to be done in early March. But Moore said the company has not been able to get the equipment needed to meet the state permit deadline.
“This project had a trifecta of challenges,” Moore said. “It happened with modules, the actual solar panels had to get changed due to supply issues. The racking had to get changed due to supply issues. And the electronics, the inverters, had to get changed due to supply chain issues.”
"You pull one of these threads, sometimes it unravels the whole thing. We change modules, and now we need to change the layout on the roof. And now we need to go back to fire and safety and get different permit sets from them. So it’s all tied together."
The solar industry has been hit particularly hard by the economic headwinds whipped up by the pandemic.
Companies like SunCommon had to shut down when COVID first hit. They couldn’t visit with homeowners or businesses to talk about projects, or even work on the sites they had in the pipeline.
Then when things began to open up, developers couldn’t get parts from Asia.
Moore says imports on solar power equipment started slowing last year, and it’s only gotten worse.
“So on this, you can’t order hundreds of thousands of dollars of materials until you know that you’ve got the permits,” Moore said. “And that’s one of the challenges. You pull one of these threads, sometimes it unravels the whole thing. We change modules, and now we need to change the layout on the roof. And now we need to go back to fire and safety and get different permit sets from them. So it’s all tied together.”
The supply chain shortages have been holding up solar projects across the state.
Washington Electric Coop says some equipment is being delayed more than half a year. In Manchester, MHG Solar says delivery schedules are shifting all the time, and it's impossible to predict when work can get done.
Renewable Energy Vermont director Peter Sterling says there will be an impact on how aggressively the state can move forward on meeting its clean energy goals.
“For anyone who's concerned with Vermont, you know, playing its role in stopping climate change, this should be a big concern, whether we can make the transition to renewable energy fast enough,” Sterling said.
“For anyone who's concerned with Vermont, you know, playing its role in stopping climate change, this should be a big concern, whether we can make the transition to renewable energy fast enough."
Developers usually have a year to finish their project after they receive a state permit, and Renewable Energy Vermont asked the Public Utility Commission to extend those deadlines, since so many projects were being held up.
Any project that is permitted through 2022 now has an extra year to get online.
Michelle Davis, an analyst with the energy consultant firm Wood Mackenzie, says the supply chain issues have been slowing down development across the country.
“The hope is that we will return to sort of a balancing out of things, and relief from some of these supply change constraints starting in, you know, late 2022, early 2023,” she said.
Davis says because there is so much demand for solar power, developers across the country are all competing for the same equipment, and it could be a full year before things stabilize.
About a third of all the large-scale utility solar projects across the country were delayed at the end of last year, according to a Wood Mackenzie report.
And along with equipment shortages, Davis says the solar industry is experiencing stiff price increases.
Solar equipment typically gets cheaper every year as technology improves and manufacturers of solar technology get better at what they do. But Davis says the solar industry has been hit by the same price jumps in steel, computer chips and raw materials that have been causing inflation across the board.
She says costs rose almost 20% for some equipment last year.
“Basically the only projects that were going to get installed in 2022 were those that had already procured and lined up their equipment,” Davis said. “So that’s just kind of the reality right now for the solar industry.”
Editor's note: SunCommon is a VPR underwriter.