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.Buttheevolvin...