The Inflation Reduction Act (IRA) will lead to the development of 550GW of new, utility-scale clean power by 2030 – with an enormous amount of wind and solar farms set to be deployed, steps must be taken to protect personnel and assets from fire risk, which is often underestimated and overlooked. The US wind and solar industries have received a boost with the introduction of the IRA, which includes numerous measures aimed at incentivizing investment in renewable energy.
American Clean Power (ACP) has described the Act as the “single largest investment in renewable power in the history of this country, and the largest investment in climate action to date.”
"The global clean energy transition has been well underway to expand and grow year over year. Now with the passing of the IRA, I believe this unprecedented bit of legislation will facilitate the near doubling of that expected renewable growth and investment rate in the US over the next 10 years,” notes Ross Paznokas, Firetrace’s Global Business Development Manager – Clean Energy.
How the Inflation Reduction Act Will Impact Wind Energy
The Act extends the production tax credit and investment tax credit for wind – and solar – until 2024 before transitioning to a technology-neutral tax credit that will remain in place until 2032 or when electric-sector emissions fall to 75% of 2022 levels, whichever is later.
From the perspective of wind, before the enactment of the Inflation Reduction Act, the Section 45 production tax credit (PTC) for wind projects was available only to facilities that began construction before January 1, 2022. The IRA extends the Section 45 PTC to wind projects that begin construction before the end of 2024.
How the Act Will Impact Solar Energy
The IRA provided a timely boost for the US solar industry. It includes long-term solar and storage tax incentives, as well as investments in domestic solar manufacturing.
Provisions in the IRA include significantly expanding US tax credits for solar projects – the revised Section 45 PTC provides a base credit of 0.3 cents per kilowatt hour (kWh) of electricity produced by solar projects. For projects that satisfy the applicable wage and apprenticeship requirements, the credit rate would be 1.5 cents per kWh.
The Solar Energy Industries Association has said: “Now the work can begin to build out America’s clean energy economy with historic deployment.”
How Much Can We Expect the Wind and Solar Industries to Grow?
ACP’s preliminary assessment of the Act concluded that it would deliver an estimated 525 to 550GW of new, utility-scale clean power during the period of 2022-2030. The ACP added: “With stable policies in place, we expect annual wind, solar, and energy storage capacity installations to grow to over 90 GW by the end of the decade, more than tripling the 28 GW installed in 2021.”
Put simply, the ACP has said roughly 40% of the US’ electricity will come from wind, solar, and energy storage by 2030.
Wind and Solar Industries Must Properly Address Fire Risk
As the level of wind, solar, and energy storage deployment is expected to dramatically increase, it is vital that action is taken now to protect such assets against fire. However, there are serious concerns that the wind and solar industries are failing to properly assess fire risk and may indeed be significantly underestimating the problem.
For example, in the wind industry, there is no requirement to conduct a fire risk assessment, while in the solar industry, research has indicted that fire risk is underreported in the renewables sector and therefore underestimated.
Why the Wind and Solar Industries Should Act Now to Address Fire Risk
- Protecting on site personnel by minimizing fire risks
- Protecting wind and solar assets by minimizing fire risks
- Saving on costs related to the repair and replacement of damaged wind turbines and solar panels
- Potentially reducing insurance costs – insurers could potentially adjust rates if wind and solar farms include fire suppression measures
- Reducing wildfire risk in the surrounding area
- Giving a boost to the reputation of your company, and the renewables industry in general, by minimizing fire risk at wind and solar farms.
Despite the fact wind farm and solar farm fires pose a danger to life and could potentially cause millions of dollars of damage, the renewables industry has been worryingly slow in addressing the issue. It is vital that you understand the level of fire risk you may face at your wind or solar farm.