2023renewableenergyindustryoutlookContentsRenewableenergygrowthsetfortakeoffamidsupplyandinterconnectionturbulence3Trendstowatch1.DomesticmanufacturingRisingcleanenergycomponentmanufacturingcouldeasesupplychainsnagsovertime42.DecarbonizedfuelNewcleanhydrogeneconomicscouldopenavenuesforrenewableproviders53.EnergyequityIRAhelpsspurrenewableproviderstopursueopportunitiesinlow-incomecommunities64.CybersecurityRenewableenergyindustryfocusesonmanagingincreasingcyberrisk75.OffshorewindOffshorewindindustryaddresseschallengestounlockrapidgrowth8Growthunleashedwithinlimits9Let’stalk1022023renewableenergyindustryoutlook2RenewableenergygrowthsetfortakeoffamidsupplyandinterconnectionturbulenceIn2022,USrenewableenergygrowthslackeneditspaceduetorisingcostsandprojectdelaysdrivenbysupplychaindisruption,tradepolicyuncertainty,inflation,increasinginterestrates,andinterconnectiondelays.1Manyofthesechallengeswilllikelycarryoverinto2023,creatingstrongheadwinds.Butgrowthwilllikelyacceleratepoweredbyrobustdemandandtherecord-breakingraftofcleanenergyincentivesintheInflationReductionAct(IRA).TheUnitedStatesadded5.7gigawatts(GW)ofutility-scalesolargenerationcapacityand7.5GWofwindcapacityinthefirsteightmonthsof2022,down26%and8%,respectively,fromJanuarytoAugust2021.2Nevertheless,windandsolaraccountedfornearly70%ofcapacityadded,andrenewableenergy’sshareofUSelectricitygenerationroseto23%from21%duringthesameperiod.3Movinginto2023,driversforrenewablegrowtharesomeofthestrongesttheindustryhasseen,includingcompetitivecosts,supportivepolicies,andburgeoningdemand:•Costcompetitiveness.Whilerenewableenergycostsmaycontinuetorisetemporarilyin2023duetoongoingsupplychainchallenges,windandsolarwilllikelyremainthecheapestenergysourcesinmostareas,asfuelcostsforconventionalgenerationhavebeenrisingfasterthanrenewablecosts.4•Federalcleanenergypolicies.Amongothersupportiveprovisions,theIRAextendswindandsolartaxcreditsforprojectsthatbeginconstructionbefore2025andtechnology-neutralcreditsthroughatleast2032.5Projectionssuggestthelawwillspur525to550GWofnewUSutility-scalecleanpowerby2030.6•Statecleanenergypolicies.Twenty-twostatesandtheDistrictofColumbiaaretargeting100%renewableenergyor100%carbon-freeelectricity,oftenthroughcleanandrenewableenergymandatesandincentives,withtargetdatesbetween2040and2050.7•Utilitydecarbonization.AsofOctober2022,43ofthe45largestUSinvestor-ownedutilitieshavecommittedtoreducingtheircarbonemissions,andboostingrenewablesisoneoftheirkeystrategiesformeetingthosecommitments.8•Corporaterenewableprocurementspurredarecord11GWofUScleanenergyinstallationsin2021andissettoexceedthatin2022.9Morethan380globalbusinesseshavecommittedto100%cleanelectricitybyjoiningtheRE100renewableelectricityinitiative,upfromabout200in2019.10•Residentialsolardemandisgrowingfasterthanever,up35%inH12022yearoveryear,ashouseholdsreacttorisingretailelectricitypricesandweather-drivenpoweroutages.11•Privateinvestmentinrenewableshitarecordhighof$10billioninthepastyear.12Thatcouldcontinue,asinvestorsareattractedbytransparentreturnsonmaturetechnologiesbackedby10-yeartaxcreditswithdirectpayoptions.Growingdemandin2023couldexacerbatesupplychainconstraintsandinterconnectionbottlenecks,furtherboostingpricesandextendingprojecttimelines.Andtransmissionlimitationscouldcontinuetohampergrowthuntilcapacityissignificantlyexpanded.Buttheevolvingtrendsandopportunitiesthatfollowcouldhelptheindustrynavigateheadwindsasitgrowsin2023andsetthestageforfastergrowthin2024.2023renewableenergyindustryoutlook3RisingcleanenergycomponentmanufacturingcouldeasesupplychainsnagsovertimeUSmanufacturingdoesnotcurrentlymeettherenewableenergysector’sneedsforcleanenergycomponentssupportedbysecureandsustainabledomesticsupplychains.13ButIRAincentiveshavealreadyspurrednewplantannouncementsandsignificantinvestment,andthat’slikelytogainsteamin2023.14US-basedmanufacturersproducednearly5gigawatts(GW)ofsolarphotovoltaic(PV)modulesin2021,15fallingwellshortofsupportingthemorethan20GWofUSsolarpowercapacityinstalledthesameyear.16Andtomeettheadministration’sgoalof30GWofoffshorewindby2030,thefledglingoffshorewindsupplychainfortowers,blades,nacelles,andsubstructureswillneedtodevelopfurther.17Inaddition,theelectricgridwillneedfarmorebatterystoragecapacitytohandlegrowingvolumesofvariablerenewablesandelectricvehicles(EVs).18TheUnitedStateslagsseveralcountriesinthemanufactureandsupplyofmaterials,components,andendproductsforgridstorage,19anditminesandprocesseslittletononeoftherawmaterialsrequiredforlithium-ionbatteries,suchascobalt,nickel,andlithium.20OnegoaloftheIRAistohelpdevelopandsecuresupplychainsforthesecleanenergycomponentsbystimulatingdomesticmanufacturingandtoeventuallyachievecostcompetitivenessthrougheconomiesofscale.21Keyprovisionsinclude:•Advancedmanufacturingproduction.Taxcreditsfordomesticproductionandsaleofqualifyingsolarandwindcomponentssuchasinverters;batterycells;PVwafers,cellsandmodules;windturbineblades,nacelles,andtowers;anda10%creditforcriticalmineralsproduction.22•Qualifiedadvancedenergyproject.Investmenttaxcreditsof6%or30%foranewcategoryofprojects:thosethatre-equip,expand,orbuildqualifieddomesticmanufacturingorindustrialfacilitiestoassistintheproductionorrecyclingofrenewableenergyproperty.23•Domesticcontent.AdditionaltaxcreditsabovethebaseinvestmenttaxcreditforqualifiedadvancedenergyprojectsiftheprojectusescertaincomponentsproducedintheUnitedStates.24WithinweeksoftheIRA’spassageitbecameclearthattheincentiveswilllikelybringsignificantnewmanufacturingofcleanenergycomponentstotheUnitedStates.25Althoughtheindustryawaitsfederalguidancetoclarifymanydetails,investmentsareflowing.Twomonthsafterthebill’senactment,onetallycalculatedabout$28billioninnewmanufacturinginvestmentinthesolar,battery,andEVmanufacturingsectorshadalreadybeenannounced.26Twoofthelargestsolarmanufacturersareplanningnewplants,expandingexistingplants,anddevelopingthesupplychainfromrawmaterialsthroughmodules.27AndmultiplebatterymanufacturershaveannouncedplansfornewUSplants,withmostcurrentlyfocusedonEVbatteries.28Whilethismayspellgoodnewsforrenewableenergysupplychainsinthelongerterm,manyseeatleastacouplemoreyearsofchallenges.InarecentDeloittesurveyofUSpowersectorexecutives,56%ofrespondentssaidthatwhilethenewincentivesfordomesticmanufacturingofcleanenergycomponentswillspurnewproduction,itcouldtakemorethantwotothreeyearstoeasesupplychainconstraints(figure1).29Inaddition,theBidenadministrationisworkingwiththeEuropeanCommissiontoaddressconcernsrelatedtotheIRA’sdomesticmanufacturingprovisions.30Figure1.Givennewincentivesfordomesticmanufacturingofcleanenergycomponents,doyouthinksupplychainchallengeswilleaseoverthenexttwotothreeyears?N=72Source:DeloittesurveyofpowerandutilitiessectorexecutivesinSeptember/October2022.Domesticmanufacturing10%15%30%45%60%Yes,domesticmanufacturingwillgrowfastenoughtoeasesupplychainchallenges15%Domesticmanufacturingwillnotbeabletocompetewithlow-cost,offshoresources11%Demandisgrowingsofastthatsupplychainsmaynotbeabletokeepup18%Domesticmanufacturingwillgrow,butitwilltakemorethan2-3yearstoeasesupplychainchallenges56%2023renewableenergyindustryoutlook42NewcleanhydrogeneconomicscouldopenavenuesforrenewableprovidersDecarbonizedfuelLong-sizzlinginterestingreenhydrogenignitedwiththeIRA’senactmentinAugust2022.Thelaw’s$3perkilogramtaxcreditforqualified“clean”hydrogencouldmakeitprice-competitivewithhighercarbon“gray”hydrogeninmuchofthecountry(figure2).31Whilechallengessuchaslackofinfrastructurestillmakehydrogenuneconomicforsomeuses,newIRA-driveneconomicscouldopenavenuesforrenewableenergydevelopersandproducerstobenefitin2023.CurrentUSdemandforhydrogenisabout10millionmetrictonsannually,andit’smainlyusedforoilandpetrochemicalrefiningandprocessing,ammoniaproduction,foodanddrugproduction,andotherindustrialprocesses.32About99%isgrayhydrogen,usuallyproducedthroughnaturalgassteammethanereforming,whileonlyabout1%is“green”hydrogen,producedfromelectrolyzedrenewable(orotherlow-carbon)electricityandwater.33There’sgrowinginterestinusinggreenhydrogeninthetransportation,electricpower,naturalgasdistribution,andotherindustrialsectors,butoftenneworretrofittedinfrastructurewouldbeneeded.34Furthermarketandecosystemdevelopmentisalsoneeded,andthe$8billioninvestmentinregionalcleanhydrogenhubsfromtheInfrastructureInvestmentandJobsAct(IIJA)canhelpaddressthat.Interestisalreadygrowinginparticipatinginhydrogenandotherlow-carbonhubs,ascostsavingsfromco-locationcanimproveprojecteconomics.Somesuggesttheindustryalsoneedsaregulatoryframeworktoassessthelong-termrisksandimplicationsoftransportinganddistributinglargevolumesofhydrogen.35Despitechallengesthatmayrequirelonger-termsolutions,thenewtaxcreditcreateseconomicsthatcanpotentiallydrivebenefitsfortherenewableenergyindustryinthenearterm.Belowaresomeoptionstheindustrycanconsiderin2023andbeyond.•Siteelectrolyzersnearcurrentgrayhydrogenusers,wherehydrogeninfrastructureandmarketsalreadyexistandindustrialuserscouldwelcometheopportunitytodecarbonizefuel.•Useelectrolyzerstodrawpowerfromrenewableresources;useproceedsfromcleanhydrogensalestodeploymorerenewableassets.36•Connectelectrolyzerstothegridandusethemasflexibleloadtohelpbalancethegrid,drawingrenewableelectricitywhenoutputishighandpricesarelow,andrampingdownwhenrenewableoutputislowersothepowercanbeusedtomeetgridneeds.Insomemarkets,compensationforprovidingflexibleloadcouldhelpoffsethydrogenproductioncosts.37•Considersitingelectrolyzersnearportstotargetapotentiallygrowingcleanammoniaexportmarket.Figure2.GreenhydrogenistypicallymorecostcompetitiveundertheIRANote:Greenhydrogenassumedtobeproducedwithutility-scalesolar.Otherzero-emittingelectricitysourceswillleadtodifferentcosts.Source:JohnLarsenetal.,“AturningpointforUSclimateprogress:AssessingtheclimateandcleanenergyprovisionsintheInflationReductionAct,”RhodiumGroup,August12,2022.Greenhydrogenprices,2030Conventionalhydrogenrange$1.54$0.99$0.39LowcostHighcost$3.39$4.92$1.92(USdollarsperkilogram)CurrentpolicyIRA2023renewableenergyindustryoutlook53IRAhelpsspurrenewableproviderstopursueopportunitiesinlow-incomecommunitiesEnergyequityUntilnow,thecleanenergytransitionhasfocusedmainlyonmoreaffluentAmericans,whohavebenefittedfromincentivessuchastaxcreditsforrooftopsolarorEVs,whilemanylow-incomecommunitieswereleftbehind.38Butoutreachtolow-incomecommunitiescouldaccelerateinthecomingyearasfederalpolicywithenvironmentaljustice39provisionsmayfurtherincentivizerenewabledeveloperstoexpandintothesecommunities.About44%ofUShouseholdsaredefinedaslow-income,40andthisgroupcouldpotentiallybenefitthemostfromcleanenergysavingsbecausetheir“energyburden,”orshareofhouseholdincomespentonenergy,at8.6%,isabout3.5timesthenationalaverageandcanbeashighas30%.41Businessmodelssuchascommunitysolarareexpectedtogrowfastinlow-incomecommunities,astheycanpotentiallyoffercustomersmorepredictable,affordableratesandstrengtheneconomicsecuritywhilealsoimprovingairqualityandprovidinglocaljobs.42Twenty-threestatescurrentlyhavecommunitysolarprogramswithlow-andmoderate-incomecustomer-specificprovisions.43Somestatesandutilitieshaveofferedcleanenergyprogramstolow-incomecommunitiesforseveralyears.Butrisingelectricityprices,adoublingofutilityarrearagessince2019,andanincreasingfocusonenvironmentaljusticehaveaddedurgencytotheissue.44InJanuary2021,theBidenadministrationcreatedtheJustice40Initiative,whichaimstodeliver40%oftheoverallbenefitsoffederalclimateandcleanenergyinvestmentsto“disadvantagedcommunitiesthataremarginalized,underserved,andoverburdenedbypollution.”45Forexample,cleanenergyprojectseligiblefortheIRA’s30%investmenttaxcreditcanadda10%or20%bonuscreditiflocatedinan“environmentaljustice”area.46Manytypesofprogramsservelow-incomecommunities.ACaliforniaprogramprovideslow-incomehouseholdswithsolarphotovoltaic(PV)systemsandenergyefficiencyupgradesatlittletonocosttoresidents.47Aspreviouslynoted,manystatesoffercommunitysolarforlow-incomecustomers.Utilitiesandsolardevelopersaredevelopingbusinessmodelsthatcanleveragestateandfederalincentivestodeliverfreeorlow-costsolartoeligiblehouseholds.And46%ofpowerandutilityexecutivesDeloitterecentlysurveyedsaidtheircompanieshadplanstobuildrenewableenergyprojectsinlow-incomecommunitiesortohelplow-incomecustomersprocurerenewableenergy(figure3).48Figure3.Doesthecompanyyouworkforhaveplanstobuildrenewableenergyprojectsinlow-incomecommunitiesortohelplow-incomeclientsprocurerenewableenergy?Source:DeloittesurveyofpowerandutilitiesexecutivesinSeptember/October2022.0%13%25%38%50%Yes46%No,butwearedevelopingplans24%No18%Notsure/notapplicable13%2023renewableenergyindustryoutlook64RenewableenergyindustryfocusesonmanagingincreasingcyberriskCybersecurityOnesignthattherenewableenergyindustryismaturingisthatit’sincreasinglythetargetofcyberattacks.49Cyberthreatsareexpectedtorisein2023andbeyondasthecleanenergytransitionprogresses,focusingonbothutility-scaleanddistributedrenewableenergyresources.50Andtheindustryispreparingforthegrowingwaveofdistributed,oftendigitallycontrolled,third-partyowned,andaggregatedenergyresourcesonthegrid,abouthalfofwhicharesolarenergysystems.51Utilitiesandrenewableenergydevelopersarealsoexpectedtocontinuestaffingupcybersecuritydepartmentsamidagrowinggapinqualifiedcybersecuritytalent.52Theenergyindustryisdeemedoneof16criticalinfrastructuresectorsbytheUSgovernment—andoil,gas,andelectricpowerinfrastructurehavebeentargetedformanyyears.53Theutilitiessectorreportedlysawa46%year-over-yearincreaseincyberattacksin2021,averaging736attacksperweek.54Andasrenewabledeploymentgrows,thesenewresourcesareincreasinglybeingtargeted.In2019,aUSutilityreportedthatitssolarandwindplantshadexperiencedadenial-of-serviceattack.55Acyberattackonaglobalwindturbinemanufacturerin2021compromiseddata56andwasfollowedbyattacksonthreeEuropeanwindenergycompaniesin2022.Thelatterattacksdisabledremote-controlsystemsforapproximately7,800windturbinesforaboutaday.57Theseattacksareexpectedtoincreasein2023.58Theycouldcomefromgroupsusingransomwareforfinancialpayment,nationstate-affiliatedcybercriminalsaimingtodisruptcriticalinfrastructureorsocietyasawhole,orindividualmalicioushackers.59Inrecentyears,attackshaveincreasinglytargetedindustrialcontrolsystems,oftenseekingentrythroughtheleastprotectedlinksinthesupplychain.60Thisoftencomesintheformofphishingattackslaunchedviaemailswithmalware-ladenattachmentsorlinks.61TheUSDepartmentofEnergyrecentlyreleasedastudyassessingtheriskstotheelectricgridposedbyevolvinggrowthofdistributedenergyresources(DER).62Thereareabout90GWofDERinstalledintheUnitedStatestoday,includingmorethan3millionsolarsystems.DERdeploymentisexpectedtomorethanquadrupleby2025,toapproximately380GW.63ThiscouldpresentsignificantchallengessinceDERareofteninternet-connectedandsubjecttofew,ifany,cybersecurityrequirements.IndividualDERaggregatorscouldcontrolfleetsofhundredsofthousandsofdevices,representingsignificantamountsofpower.64Andtheseentitiesarenotcurrentlysubjecttothecybersecuritystandardstowhichotherresourcesonthebulkelectricsystemmustadhere—includingtheNorthAmericanElectricReliabilityCorporation’sCriticalInfrastructureProtection(NERC-CIP)standards.NERCisworkingwithstakeholderstoconsidertherisksassociatedwithaggregatedDERparticipationonthebulkpowersystemanddevelopaplantoinstateadequatesecuritycontrolstomanagethem.65Finally,ascyberriskrises,manycompanieshavesteppeduptheirhiringofleadersandprofessionalswithinformationtechnologyandsecurityskillsets.66Thiscouldbecomemorechallenginginthenewyearduetoanacuteandgrowingshortageofskilledworkersinthefield(figure4).67Somerenewableenergyprovidersplantoseekcybersecuritytalentfromtheutilitiesandmanufacturingsectors.Butnearlyallsectorsarefeelingthepinch,andinthelongerterm,somearefocusingondevelopingandtrainingmoreoftheseworkers.68Figure4.TheUScybersecurityworkforcegapincreased9%in2022Source:(ISC)2,(ISC)2Cybersecurityworkforcestudy2022,pp.6and8.410,6951,205,812TotalUScybersecurityworkforceemployedin2022TotalUSgaptobefilled2023renewableenergyindustryoutlook75OffshorewindindustryaddresseschallengestounlockrapidgrowthOffshorewindBymid-2022,theUSoffshorewindprojectdevelopmentpipelinehadgrowntomorethan40GWofpotentialgeneratingcapacityacross12states.69Currently,just42megawatts(MW)ofcapacityisoperational,about1GWisunderconstruction,andalmost19GWisinthepermittingphase.Afurther20GWisinthesitingandplanningphasesandwilllikelytakemanymoreyearstodevelop.Butthenextfewyearscouldbecriticalforaddressingchallengestounlockthatgrowth.USoffshorewinddevelopmentislargelydrivenbystateprocurementpolicies.Ninestatescollectivelyaimtodeployabout45GWofcapacityby2040,70andothersareconsideringjoiningthem.Together,theycouldhelprealizetheadministration’sgoaltodeploy30GWofoffshorewindcapacityby2030and15GWoffloatingoffshorewindcapacityby2035.71FundingandtaxincentivesintheIIJAandIRAcouldfurthersupportthesegoals.In2023,assomeofthefirstprojectsmoveforward,theindustryisexpectedtobeworkingtoaddresssomefundamentalchallenges,including:•Financingandconstructionrisk.Offshorewindprojectsaretypicallylargeandcomplex,withmultiyeardevelopmenttimelines,multipleuncertainties,andopportunitiesfordelay.72ThefirstUSprojectsmaybepronetotimeandcostoverrunsduetolackofexperience,permittingdelays,lackofcoordinationamongnumerousspecializedcontractors,technicalandlogisticalcomplexity,supplychainconstraints,orotherfactors.PartneringwithexperiencedEuropeandevelopersandaccessingIRAtaxcreditscouldhelpmitigatesomeofthefinancingrisk,butdeveloperscouldstillfacecreditissues,accordingtoMoody’s.73•Transmissionandgridupgrades.Thefirstprojectsarebeingbuiltwiththeirowncablestoshore,butascapacityincreases,acommontransmission“backbone”andgridupgradeswilllikelybeneeded.74Thiscouldrequireextensive,coordinatedtransmissionplanningatthestate,regional,andfederallevelsandpotentiallynewfederaltaxandfundingpolicies.•Vesselsandportinfrastructure.Theindustryrequiresspecializedvesselsandportinfrastructurethatdoesn’tyetexistintheUnitedStatestoaccommodateextremelylargeandheavyequipment.75WhileloanervesselscancomefromEurope,theJonesActpreventsthemfromenteringUSports.76TheIRAprovidestaxcreditsforeligibleinvestments,butregionalcoordinationandadditionalfederalsupportmaybeneeded.•Localmanufacturingandworkforce.Supplychainshortagesandlogisticsconstraintshaveboostedcosts,sotheindustryisworkingtobuilddomesticsupplychainsandtrainalocalworkforce.Inthepasttwoyears,10majordomesticmanufacturingfacilitieswereannouncedatportsalongtheEastCoast,andIRAtaxcreditscouldspuradditionalinvestment.77Theindustrywillcontinuetoaddressthesechallengesin2023andbeyondandisexpectedtobenefitfromincreasingscale,well-cap-italizedinvestors,expertisefromabroad,regionalcoordination,andfederalincentivesandfunding.Figure5.USoffshorewindprojectpipelinebystate(asofMay2022)Source:USDepartmentofEnergy,Offshorewindmarketreport:2022edition,OfficeofEnergyEfficiencyandRenewableEnergy,Figure2,p.11.02,0004,0006,0008,00010,00012,000NewYorkNewJerseyCaliforniaMarylandConnecticutDelawareRhodeIslandOhioVirginiaMassachusettsNorthCarolinaPlanningSitecontrolPermittingUnderconstructionOperatingUSOffshorewindpipeline(MW)2023renewableenergyindustryoutlook8GrowthunleashedwithinlimitsTherenewableenergyindustryentersthenewyearwithsupportivefederalandstatecleanenergypoliciesinplaceandgrowingdemandacrosssectors.Whilethismaypositionitforastrongtakeoffin2023,thatgrowthcouldbetemperedbysomeofthesameheadwindsitencounteredin2022—supplychainconstraints,lackoftransmissioncapacity,andinterconnectiondelays.IRAtaxincentivesandIIJAinvestmentencouragenotonlyrenewableenergyandstoragegrowth,butalsothedevelopmentofdomesticcriticalmaterialsandmanufacturedcomponentstosupplytheindustry.Buttheseprovisionsarenotexpectedtobegintoeasesupplychainsnarlsuntil2024.78Andtransmissionandinterconnectionconstraintscouldtemporarilytightenwithburgeoningrenewableenergydemandassolutionsarebeingconsidered.Duetotheseheadwinds,renewableenergycostscouldcontinuetoriseintheshorttermbeforetheyreturntothemorethandecade-longdeclinedrivenbyincreasingscaleandtechnologicaladvances.Butwindandsolararestillthecheapestenergysourcesforpowergenerationinmostareas,andthatgapiswidening.79In2023,theindustryisexpectedtocontinuegrowingandexpandingintonewareas,suchasoffshorewind,andharnessingnewopportunitiesopenedbyIRAincentives,suchascleanhydrogenproductionandlow-incomeareasolarprograms.Andasitgainsmarketshare,it’sexpectedtofocusincreasinglyonmanagingtherisksthatcomewiththat,suchascybersecurity.Overall,astheindustryheadsinto2023,soaringdemandandattractive,long-termincentivesarecreatingstrongtailwinds,butthere’sstillapatchofturbulencetogetthrough.2023renewableenergyindustryoutlook9Let’stalkKeycontributorsMarleneMotykaUSRenewableEnergyLeaderDeloitteTransactionsandBusinessAnalyticsLLPmmotyka@deloitte.com+19736025691@MarleneMMotykaJimThomsonVicechair–USPower,Utilities&RenewablesLeaderDeloitteLLPjamthomson@deloitte.com+18132303714KateHardinExecutiveDirectorDeloitteResearchCenterforEnergy&IndustrialsDeloitteServicesLPkhardin@deloitte.com+16174373332SuzannaSanborn,seniormanager,DeloitteResearchCenterforEnergy&Industrials,DeloitteServicesLPAkashChatterjee,analyst,DeloitteResearchCenterforEnergy&Industrials,DeloitteServicesIndiaPrivateLimited2023renewableenergyindustryoutlook10Endnotes1.HanaColwell,“Cleanenergyseesstrongstartto2022,butpolicyuncertaintythreatensfutureU.S.growth,”AmericanCleanPower,June7,2022.2.USFederalEnergyRegulatoryCommission(FERC),“EnergyinfrastructureupdateforAugust2022,”October25,2022,p.4.3.USEnergyInformationAdministration(EIA),“Netgenerationbyenergysourceforallsectors,”ElectricPowerMonthly,October25,2022.4.DavidR.Baker,“Renewablepowercostsrise,justnotasmuchasfossilfuels,”Bloomberg,June30,2022.5.PublicLaw117-169(“InflationReductionAct”),CongressionalResearchService,accessedOctober28,2022.6.JohnHensley,“It’sabigdealforjobgrowthandforacleanenergyfuture,”AmericanCleanPower,August5,2022.7.BloombergNEF,“USstatesaimingfor100%cleanpowertotal22,”September5,2022;CleanEnergyStatesAlliance(CESA),“Tableof100%cleanenergystates,”November6,2022.8.CompanywebsitesforthelargestUSinvestor-ownedutilityparentcompaniesaslistedinBrianCollinsetal.,UtilityCapitalExpendituresUpdate—Energyandwaterutilitycapexplanson-tracktorecordbreaking2022,S&PGlobalMarketIntelligence,RRAFinancialFocus,April11,2022,p.5.9.EmmaPenrod,“Corporatecleanenergyprocurementontrackforanotherrecordyearafteradding11GWin2021,”UtilityDive,May18,2022.10.RE100website,“RE100members,”accessedNovember7,2022.11.SolarEnergyIndustriesAssociationandWoodMackenzie,USsolarmarketinsightfullreportQ32022,September2022,p.13.12.EmmaPenrod,“‘It’sagoodtimetobeabanker’:RE+panelreportsmassivegrowthincorporateinvestmentinrenewables,”UtilityDive,September29,2022.13.AnyaBreitenbach,“Strongersupplychainlinkstoacleanenergyfuture,”NationalRenewableEnergyLaboratory(NREL),November3,2022.14.SilvioMarcacci,“$28billioninnewcleanenergymanufacturinginvestmentsannouncedsinceInflationReductionActpassed,”Forbes,October12,2022.15.DavidFeldmanetal.,Spring2022SolarIndustryUpdate,NREL,April26,2022,p.3.16.JarrettRenshawandNicholaGroom,“BidenadmineasesTrump-erasolartariffsbutdoesn’tendthem,”Reuters,February4,2022.17.USDepartmentofEnergy(DOE),“AchievingAmericanleadershipinthewindsupplychain,”February24,2022,p.1.18.DOE,Gridenergystorage:Supplychaindeepdiveassessment,February24,2022,p.viii.19.Ibid.,p.xii.20.Ibid.,p.ix.21.TessTurner,“HowtheInflationReductionActwillhelptheUnitedStatestoleadinthecleanenergyeconomy,”CouncilonForeignRelationsblog,September19,2022.22.PublicLaw117-169(“InflationReductionAct”).23.Ibid.24.Ibid.25.EmmaPenrod,“WilltheInflationReductionActspurcleanenergymanufacturingintheUS?Taxexpertssayyes,”UtilityDive,September27,2022.26.Marcacci,“$28billioninnewcleanenergymanufacturinginvestmentsannouncedsinceInflationReductionActpassed.”27.Ibid.28.AnneFischer,“BatterymanufacturingrampsupintheU.S.,”PVmagazine,September23,2022;“USreadyforabatteryfactoryboom,butnowitneedstoholdthecharge,”S&PGlobalMarketIntelligence,October2,2022.29.TounderstandtheoutlookandperspectivesoforganizationsacrosstheUSpowerandutilitiesindustry,Deloittefieldedasurveyofmorethan70USexecutivesandotherseniorleadersinSeptemberandOctober2022tocaptureinsightsfromrespondentsinelectricitygeneration,transmission,anddistribution.30.JeanChemnick,“WhyAmerica’sclimatelawiscausingriftsatCOP27,”EENews,November7,2022.31.“Clean”hydrogenisproducedthroughlow-carbonprocessessuchasrenewable-poweredelectrolysisandhigheremission“gray”hydrogenisusuallyproducedthroughmethanereformation;DanEspositoandHadleyTallackson,“TheInflationReductionActupendshydrogeneconomicswithopportunities,pitfalls,”UtilityDive,September30,2022.32.NREL,“Studyshowsabundantopportunitiesforhydrogeninafutureintegratedenergysystem,”October8,2020.33.DOE,HydrogenStrategy:Enablingalow-carboneconomy,OfficeofFossilEnergy,July2020,p.5.34.Ibid.,p.1.35.DanielArchuletaetal.,“Hydrogensectorneedsmoreregulatorycertainty,”TroutmanPepper,September14,2022.36.EmmaPenrod,“Asmomentumforhydrogenbuilds,electricutilitieschartmultiplepathsforward,”UtilityDive,August18,2021.37.EspositoandTallackson,“TheInflationReductionActupendshydrogeneconomicswithopportunities,pitfalls.”38.MansieHough,LaceyShaver,andZachGreene,“7waysUScitiescanmakecleanenergyinitiativesmoreequitable,”WorldResourcesInstitute,May26,2022.39.TheWhiteHouse,“EnvironmentalJustice,”accessedNovember2022.40.DOE,“Low-incomecommunityenergysolutions,”accessedNovember7,2022.41.Ibid.42.Sunrun,“Howrenewableenergycanhelplowincomecommunities,”accessedNovember7,2022.43.NateHausman,“Howcommunitysolarcanbenefitlow-andmoderate-incomecustomers,”WorldResourcesInstitute,June16,2022.2023renewableenergyindustryoutlook11Endnotes44.RobertWalton,“Theenergysystemis‘inherentlyracist,’advocatessay.Howareutilitiesrespondingtocallsforgreaterequity?,”UtilityDive,October26,2022.45.TheWhiteHouse,“Justice40:Awhole-of-governmentinitiative,”accessedNovember2022.46.The10%bonusisforprojectslocatedinalow-incomecommunityoronNativeAmericanland.The20%bonusisavailableforprojectsthatarepartofaqualifiedlow-incomeresidentialbuildingprojectoraqualifiedlow-incomeeconomicbenefitproject;Congress.gov,H.R.5376-InflationReductionActof2022,117thCongress(2021–22).47.CaliforniaDepartmentofCommunityServicesandDevelopment(CSD),“Low-IncomeWeatherizationProgram,”accessedNovember7,2022.48.TounderstandtheoutlookandperspectivesoforganizationsacrosstheUSpowerandutilitiesindustry,Deloittefieldedasurveyofmorethan70USexecutivesandotherseniorleadersinSeptemberandOctober2022tocaptureinsightsfromrespondentsinelectricitygeneration,transmission,anddistribution.49.CasPurdy,“Expertswarnrenewableenergynotimmunetocyberattacks,”AmshoreRenewableEnergy,accessedNovember2022.50.DOEOfficeofCybersecurity,EnergySecurity,andEmergencyResponse(CESER)andOfficeofEnergyEfficiencyandRenewableEnergy(EERE),CybersecurityconsiderationsfordistributedenergyresourcesontheU.S.electricgrid,October2022,p.1.51.KelseyMisbrener,“DOEcallsforincreasedcybersecuritymeasuresinpreparationforrapiddistributedenergygrowth,”SolarPowerWorld,October6,2022.52.(ISC)2,(ISC)2Cybersecurityworkforcestudy,2022,p.8.53.USCybersecurityandInfrastructureSecurityAgency(CISA),“Criticalinfrastructuresectors:Energysector,”accessedNovember2022.54.CyberSecurityHub,“Renewableenergyremainsalucrativetargetforcybercriminals,”accessedNovember7,2022.55.WoodMackenzie,Assolarcybersecuritybecomescritical,industrycollaborationandeducationbecomevital,accessedNovember7,2022,p.4.56.CyberSecurityHub,“Renewableenergyremainsalucrativetargetforcybercriminals.”57.CatherineStupp,“Europeanwind-energysectorhitinwaveofhacks,”WallStreetJournal,April25,2022.58.TheWhiteHouse,“StatementbyPresidentBidenonournation’scybersecurity,”March21,2022;AliElnaamaniandEricErvin,“Cyberresiliencespursreassuranceforrenewables,”Benchmark,2022.59.RobertWalton,“SophisticatedhackerscouldcrashtheUSpowergrid,butmoney,notsabotage,istheirfocus,”UtilityDive,October28,2021.60.StuSjouwerman,“So,howdidRussiasucceedinhackingourenergysystems?,”KnowBe4,March30,2022.61.StuSjouwerman,“Phishingtargetsindustrialcontrolsystems,”KnowBe4,February25,2022.62.DOECESERandEERE,CybersecurityconsiderationsfordistributedenergyresourcesontheU.S.electricgrid.63.Misbrener,“DOEcallsforincreasedcybersecuritymeasuresinpreparationforrapiddistributedenergygrowth.”64.DOECESERandEERE,CybersecurityconsiderationsfordistributedenergyresourcesontheU.S.electricgrid,p.8.65.NorthAmericanElectricReliabilityCorporation(NERC),“Distributedenergyresourcestrategy,”November2022,p.1.66.FelicityBradstock,“Energyjobsarefinallyrecovering,withrenewablesleadingtheway,”Oilprice.com,September25,2022.67.CamillaNaschert,“Skillsshortageimperilsglobalenergytransition,”S&PGlobalMarketIntelligence,September12,2022.68.Ibid.69.Thisisthesumofcurrentinstalledprojects,approvedprojects,projectsinthepermittingprocess,existingleaseareas,andunleasedWindEnergyAreas(WEAs);WalterMusialetal.,Offshorewindmarketreport:2022edition,DOEEERE,August2022,pp.viand10.70.KassiaMicek,“USadded6.619GWofutility-scalecleanpowercapacityinQ12022,”S&PGlobalCommodityInsights,May25,2022.71.TheWhiteHouse,“Factsheet:Biden-HarrisadministrationannouncesnewactionstoexpandU.S.offshorewindenergy,”September15,2022.FloatingoffshorewindturbinesareplannedforthedeeperwatersofftheUSWestCoastbecausetheyarenotfixedtothebottomoftheoceanlikemostofthosebeingbuiltinshallowerAtlanticcoastalwaters.72.EricPogueetal.,“Offshorewindchallenges,”ProjectFinanceInternationalandRefinitiv,April2022,pp.1–2.73.AllisonGood,“USoffshorewindcreditrisksmaymaterializeasindustrymatures,”S&PGlobalMarketIntelligence,July22,2022.74.JaredAnderson,“USoffshorewinddevelopmentchallengescomingintofocusasprojectsmature,”S&PGlobalCommodityInsights,May18,2022.75.EduardoGarcia,“USwindvesselinvestorsonstandbyuntilmarketforcesalign,”Reuters,October26,2022.76.Ibid.77.Musialetal.,Offshorewindmarketreport2022edition,DOEEERE,August2022,p.44.78.SeanRai-Roche,“IRAimpactnotfeltuntil2024whilemodulesupplywillremainconstrictedintheshort-term–WoodMac,”PVTech,September22,2022.79.DavidR.Baker,“Renewablepowercostsrise,justnotasmuchasfossilfuels,”Bloomberg,June30,2022.2023renewableenergyindustryoutlook12AboutthispublicationThispublicationcontainsgeneralinformationonlyandDeloitteisnot,bymeansofthispublication,renderingaccounting,busine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