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The U.S. pioneered the combination of solar panels and batteries that makes it possible to get power from the sun when it isn’t shining. Now it risks being left behind thanks to a trade war and Republicans’ plan to withdraw clean-energy subsidies.
The tax bill passed by the House would phase out tax breaks for various green technologies, including energy storage facilities that use batteries to store power that gets released when the grid needs it. Grid batteries are also heavily exposed to tariffs because, unlike EV batteries, practically none are made in the U.S. They are made in China.
This double whammy casts a shadow over a technology that is doing the heavy lifting as U.S. power demand rises for the first time in a generation. Batteries will account for 29% of the power capacity installed this year, behind only solar, the Energy Information Administration says.
The Senate may prolong the tax credits, and Wednesday’s court ruling that voided—for now—many of Trump’s tariffs underscores the uncertainty over trade policy. For green-energy companies that typically line up customers before committing to projects, that uncertainty makes it harder to put a price on power: “We have never seen such a high demand for energy, but there’s no way we can move forward,” said David Ruiz de Andrés, chief executive of solar-plus-storage company Grenergy.
The Madrid-based company has ambitions to grow in the U.S., lured by tech companies vying to build power-hungry data centers, but currently it isn’t investing in projects besides a few already under way. Grenergy’s new $4 billion investment plan prioritizes Europe, its home market, and Latin America, where it recently signed a deal with Chile’s state-controlled copper-mining giant, Codelco, to provide round-the-clock power from vast solar and battery arrays.
Solar power, 24/7 is becoming feasible (in very sunny places like Chile, anyway) thanks to battery technology improvements from Chinese manufacturers such as BYD and CATL. Their race to squeeze more capacity into less space reduced grid batteries’ cost by 40% between 2023 and 2024, according to BloombergNEF.
Not doomed, but more expensive-
Low costs, and the sheer availability of solar panels and batteries, means U.S. growth would likely be slowed rather than halted by trade barriers and withdrawn subsidies, said BloombergNEF policy expert Ethan Zindler: “Some projects will get canceled, some will go forward and get priced higher,” he said.
There aren’t enough gas turbines, let alone nuclear plants, to meet U.S. power demand. As Zindler sees it, the question is how much potential demand is destroyed by higher prices—tech companies can build more data centers in other countries—and how much Americans pay for electricity.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
Comments
"Most grid batteries use lithium-ion technology." Rube Goldberg fan that I am, I immediately thought of gravity batteries. They turn out to be more practical than I thought. A quick search turned up this piece from March: https://interestingengineering.com/energy/gravity-batteries-for-renewable-energy
A small chuckle- memory not always being totally accurate, I started this comment by looking up "Helm's Deep', only to be transported once again to the land of J.R.R. Tolkien. I guess that I'll have to revisit that saga one more time before I croak.