Global supply chain issues have made Australia’s renewable energy targets “extremely challenging” according to solar energy equipment supplier SMA Australia. SMA will double its manufacturing capabilities amid severe supply chain and elevated pricing issues.

Global chip and raw materials constraints have already seen many suppliers to the PV and storage industry delay or cancel contracts. It is no longer possible to rely on costs continually decreasing and assume that supply capacity will meet demand, warns SMA Australia. Strong relationships with credible and stable suppliers will become critical to reaching global targets.

“Over the last few months, there have been countless announcements from the federal and state governments and from the private sector relating to de-carbonisation through renewable energy deployment,” SMA Australia vice president, of large-scale and project solutions, Joshua Birmingham, says.

“This is undeniably fantastic news for Australia and for the planet, however, this growth will present challenges for the industry, where demand may outstrip supply in many key areas of the renewable energy value chain.”

As stated in the Rystad Energy report, “high prices and long lead times threaten solar PV capacity build-out” the forecasts of 225GWac of PV to start construction in 2023 could potentially be downgraded.

The report also highlights how lead times for new inverters are currently being quoted anywhere between six to 15 months, highlighting the severity of the current blockages in the supply chain.

“A lot of EPCs and developers in the Australian market have already been impacted by long equipment delays or even cancellations,” Joshua adds.

“Given inverter selection is made at such an early stage in Australia security of supply and lead time certainty is paramount, the risk of a delay to commercial operation due to supplier delays is massive.”

Such challenges are one of the key reasons SMA announced plans to double its production capacity at its German headquarters. With a current capacity of 21GW, the German manufacturer expects to take that capacity to 40GW by 2024.