2024 U.S. Renewable Energy Industry Outlook: Historic Investment, Strengthened Domestic Supply Chains

Illustration of solar panels, other energy sources, and construction worker

(Credit: Deloitte)

by | Dec 14, 2023

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As federal investment towards renewables remains historically high and demand rises from corporations and states working to decarbonize, a new report from Deloitte indicates that the clean energy industry in the United States may continue to grow rapidly in 2024, encouraged by a number of factors.

The report includes expectations of shorter, domestic-based supply chains, reskilling the workforce to meet clean energy development, and a focus on renewables as a climate resilience strategy, among other trends that may allow the industry to address obstacles it has faced in the past two years.

Federal Investment Boosts Renewables, Supply Chain Benefits

Deloitte reports that over the past two years, the Infrastructure Investment and Jobs Act and Inflation Reduction Act have contributed to $227 billion of public and private investment in utility-scale solar, storage, wind, and hydrogen. In 2022, states also offered a record-breaking $24 billion in tax breaks to attract renewables projects.

Solar and storage technologies have seen the most growth in the past year, with an addition of 24 gigawatts of solar capacity in the past year, more than double the amount added in 2022. Meanwhile, wind investment dropped 35% during 2023 due to high costs and permitting challenges.

The sector is expected to see a better year in 2024, especially if governments work to expedite permitting, ease financing, and make adjustments to incentives for wind development.

The report explains that a “domestic clean energy manufacturing revival” is taking place as producers reshore to take better advantage of IRA tax credits, resulting in more resilient supply chains and decreased emissions.  Avoiding imports for renewable components can also help companies avoid project delays or cancellations.

The report also expects the critical mineral market to experience supply gaps as demand for electric vehicle batteries and renewable energy storage increases. Some domestic battery recycling companies are working to fill this supply gap, and a recent discovery of a massive lithium deposit in Nevada may also help meet demand, says the report.

As renewable energy companies continue to reshore in 2024, the report includes expectations for more strategic reshoring joint ventures, digitization of supply chains, and increased development of end-of-life management and recycling of solar panels, wind blades, batteries, and electrolyzers.

Workforce a Requirement for Clean Energy Transition

Deloitte’s report claims that training and retraining a workforce for clean energy jobs is “key to decarbonization.” Clean energy jobs in the U.S. have reportedly grown at 10% in the past two years, representing a faster pace than overall U.S. employment growth.

A large share of new jobs are in construction, and with a workforce shortage of about half a million in the construction sector, clean energy buildouts could be constrained. The report also identifies a skills gap for green jobs, despite an increase of 20% in U.S. green job postings in 2022. Deloitte recommends upskilling the existing workforce in energy communities, creating high-wage jobs with upwardly mobile career pathways, and collaboration with educational institutions.

The report also emphasizes that renewables have tended to display more resilience amidst extreme weather events than conventional power sources. This additional benefit to renewables development may further support a transition away from gas-powered utilities as such weather events become more common. Renewables paired with energy storage also provide a reliable backup energy source with a much lower environmental impact than traditionally used, high-emissions gas peaker plants.

In the coming year, Deloitte expects that the clean energy industry could see historic climate legislation take greater effect, yet a surge in renewables projects and domestic supply chains will require a bigger, smarter grid, a skilled workforce to build and operate new plants, and a streamlined process for the development of both.

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