Deloitte Report Points to Strong Growth in Renewables for 2023

renewable energy

(Credit: Pixabay)

by | Dec 8, 2022

renewable energy

(Credit: Pixabay)

Deloitte’s report, 2023 Renewable Energy Outlook, illustrates that US renewable energy growth slackened its pace in 2022 due to rising costs and project delays driven by supply chain disruption, trade policy uncertainty, inflation, increasing interest rates, and interconnection delays. While many of these challenges will likely carry over into 2023, growth will likely accelerate, powered by robust demand and the record-breaking raft of clean energy incentives in the Inflation Reduction Act (IRA).

Major factors spurring industry growth include cost-competitiveness, federal and state clean energy policies, utility decarbonization, corporate renewable procurement, residential solar, and private investments.

Trends and opportunities for the renewable energy industry growth in 2023, and those that will set the stage for faster growth in 2024 include:

    • Rising clean energy component manufacturing could ease supply chain snags over time. US manufacturing does not currently meet the renewable energy sector’s needs for clean energy components supported by secure and domestic supply chains. IRA incentives have already spurred growth, which will continue to gain steam in 2023.
    • New clean hydrogen economics could open avenues for renewable providers. Interest in green hydrogen ignited with the IRA’s enactment in August 2022. The law’s $3 per kilogram production tax credit (PTC) for eligible “clean” hydrogen could make it price-competitive with higher carbon “gray” hydrogen in much of the country.
    • IRA helps spur renewable providers to pursue opportunities in disadvantaged communities. Outreach to low-income and disadvantaged communities could accelerate in the coming year. About 44% of US households are defined as low-income, and this group could potentially benefit the most from clean energy savings, since their “energy burden,” or share of household income spent on energy, at 8.6%, is about 3.5 times the national average, and can be as high as 30%.
    • Renewable energy industry focuses on managing increasing cyber risk. Cyber threats are expected to rise in 2023 and beyond as the clean energy transition progresses, focusing on both utility-scale and distributed renewable energy resources. The industry is preparing for the growing wave of distributed, often digitally-controlled, third-party owned and aggregated energy resources on the grid, about half of which are solar energy systems.
    • Offshore wind industry addresses challenges to unlock rapid growth. By mid-2022, the US offshore wind project development pipeline had grown to more than 40 gigawatts (GW) of potential generating capacity across 12 states. Currently, just 42 megawatts (MW) of capacity is operational, about 1 GW is under construction, and almost 19 GW is in the permitting phase. A further 20 GW is in the siting and planning phases and will likely take many more years to develop.

The report is the result of Deloitte surveys/interviews of over 70 US executives and leaders in electricity generation, transmission and distribution.

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