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30 July 2020

What a Biden win would mean for American solar

Without a Biden win changing policy in the next few years, we have forecasted America’s solar capacity doubling from 69 GW at the end of the year, to 138 GW in 2025, then reaching 223 GW in 2030. This is a relatively conservative estimate compared to forecasters who we feel are too familiar with the USA, and not familiar enough with other markets. Beyond 2030, predictions become impractical due to perovskite and other innovations which will change the game.

But if Biden wins, all aspects of the renewable transition would be cranked into overdrive by government incentives. This would be funded by raised corporate taxes and debt spending. Supposedly this would also have an eye on economic stimulus in the context of the Coronavirus recession, but ideas like the Green New Deal have been present in the Democrat Party before the pandemic.

The headline figure for the Democrats going into this election is $2 trillion in subsidies for clean energy, an increase announced this month over the initial $1.7 trillion. That’s alongside ambitions, stated in the draft platform, for eliminating power sector emissions by 2035, net-zero emissions for all new buildings from 2030, and rollouts of 500,000 zero-emission school buses, 500 million solar panels, 60,000 wind turbines coupled with interstate transmission projects. Unspecified promises of investment into batteries and battery research were also made.

This platform is due to be ratified and updated at the Democrat 2020 convention, held in August.

The ‘500 million solar panels’ phrase has been seen before, in Hillary Clinton’s 2016 campaign. Back then, it was taken to mean 140 GW; by now it could imply 175 GW, but only if those making the promise had the past few years’ panel size increase on their minds.

In any case, this level of solar deployment through to 2025 is at least double our original forecast, and exceeds even the most optimistic forecasts made for current conditions. It would bring the US’s solar capacity to over 200 GW, on a par with China’s.

Biden’s victory in the primaries was a win for the more moderate wing of the party, but the progressive wing still has a highly vocal base, and both Sanders and Alexandria Ocasio-Cortez have been brought onto the campaign’s Climate Unity Taskforce.

The resulting proposals are more ambitious than a climate bill pushed by Pelosi, which sought a carbon-neutral power sector five years later in 2040. Nonetheless, the Biden campaign’s vision remains less rapid than the Green New Deal advocated by the Democrats’ progressive faction, and Biden has not called for a ban on fracking.

Unfortunately, Biden’s Climate Plan also includes carbon-capture, which we consider a blind alley. It is a technology which simply doesn’t yet exist at the necessary level of efficiency, and maybe never will for a reasonable cost. Pinning hopes on CCUS research could become an excuse for keeping coal and gas plants open. Along with fracking, this could explain the surprisingly positive attitude towards Biden from some oil and gas groups, who could otherwise be supporting only Trump.

Since the Trump administration takes little interest in renewable energy and favors fossil fuel plants, much of solar’s rise is occurring under the aegis of individual states with their own initiatives. California is the most notable, heading towards additions of 9 GW solar and 3.3 GW energy storage by 2023. The Midwest set of states is another area coming alive right now; last year Fitch found 6.6 GW under construction or late planning for 2023.

 

Two things the Trump administration has taken interest in, are reducing environmental approvals for energy projects, which incidentally aided green energy, and of course tariffs. Those placed on Chinese solar imports were much higher than the typical 10% for other products, and have kept Chinese imports at only a small fraction of solar modules while maintaining domestic solar manufacturing. Chinese imports are likely to creep back in to some extent under that country’s present production glut, as well as its production-line upgrades to larger, more cost-efficient wafer and cell sizes.

Even a Democrat administration eager to boost solar deployment would not completely overturn a disfavoring of China’s products – but their approach would likely be less strict, based on incentives and subsidies, rather than purely tariffs which make solar more costly: besides, such a huge rollout would need imports to make up the numbers. The Biden campaign has said it would continue to protect domestic manufacturers, in the sense that federal subsidies would be available only under a ‘Buy American’ rule.