More than half of 2022’s solar photovoltaic (PV) projects could be cancelled or delayed due to the surging cost of manufacturing materials and shipping.
That’s according to new analysis by Rystad Energy, finding that price inflation and supply chain bottlenecks could lead to the abandonment of 50GW of the proposed 90GW of developments planned for next year.
The study reveals that manufacturing costs of PV modules have hiked by almost 50% in a year – this is mainly due to the price of polysilicon, a core element in their manufacturing, skyrocketing by more than 300%.
The cost of shipping is also continuing to rise, with the impacts of delays from the pandemic and bottlenecks leading to a 500% increase in prices for PV units from September 2019.
David Dixon, Senior Renewables Analyst at Rystad Energy, said: “The utility solar industry is facing one of its toughest challenges just days ahead of COP26.
“The current bottlenecks are not expected to be relieved within the next 12 months, meaning developers and off takers will have to decide whether to reduce their margins, delay projects or increase offtake prices to get projects to financial close.”