Solar Supply Chain: What You Need to Know

Solar is a necessity. It is imperative that we shift our energy needs away from fossil fuels and towards renewable energy. This shift needs to happen at an industrial scale, but it also needs to happen for homeowners, and it can – right now. However, waiting on solar has consequences beyond the obvious climate challenges ahead of us. 

Like everything in our world, there are forces working for and against solar. As you most likely know by now, the global supply chain has caused a number of issues across industries. From longer lead times to higher material costs, the solar supply chain is no exception. It’s important to us that we’re transparent with our customers about how these issues are affecting us as a business. Read on for what you need to know about how supply chain disruptions are affecting solar.

How is the supply chain impacting the solar industry?

Over the course of the pandemic, every aspect of global commerce has undergone major changes. These changes have caused disruptions on every level of the supply chain across industries, solar included. Not only is the supply chain an issue, but the solar industry also faces uncertainty stemming from federal policy. As a business, we’re seeing the effects of these disruptions in real time.

Rising material costs

Key elements in the manufacturing of solar panels are rising in price. Materials like steel, aluminum, and polysilicon have seen cost increases of more than 10 percent. These price increases haven’t affected the cost of most solar projects yet, but will certainly make an impact for customers starting in the new year.

Longer lead times

Over the summer, lead times across sectors reached record highs. Lead times for solar materials are still seeing delays of anywhere from four to eight weeks. This makes it difficult to maintain inventory and plan for future projects as expected.

Chip shortages

The pandemic has also caused a global shortage of semiconductor chips, hitting the automotive and electronics sectors particularly hard. When it comes to solar, chips are particularly important for components of a solar system like electric meters and inverters.

Federal policy on solar imports

In June, U.S. Customs and Border Protection issued a Withhold Release Order on silica-based products from China’s largest polysilicon provider, Hoshine Silicon Industry, due to forced labor concerns in China’s Xinjiang region. 

The panel manufacturer that BSW uses, REC, is based in Singapore and was not implicated in this terrible human rights situation. But because the panels we use are more accessible than other brands on the market (that are being held at import), they are seeing a surge in demand. Couple that with material shortages, and it means prices go up and lead times extend. 

In 2018, former President Trump ordered tariffs on foreign solar panels and cells, which began at 30 percent and have since decreased to 18 percent. These tariffs are set to expire in 2022, and President Biden will have the final say on whether or not to extend them. The President’s impending decision will no doubt affect the expansion of solar in the U.S. for the foreseeable future.

We want to emphasize that despite some solar supply chain disruptions, there’s never been a better time to install solar in NYC. If you’ve been considering making the switch, we urge you to get ahead of the uncertainty while you still can. No matter what, BSW is committed to maintaining transparency and being there for you every step of the solar process.

Ready to flip the switch to solar? Schedule your free consultation.

Want to revisit your custom solar proposal? Contact our team at info@brooklynsolarworks.com.