Meeting domestic content requirements for energy storage, particularly battery energy storage systems (BESS), poses several challenges:
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Limited Domestic Manufacturing Capacity:
- Currently, there is a limited supply of U.S.-manufactured battery cells, which are crucial for meeting domestic content requirements. This limitation is exacerbated by high demand across various sectors, including power, industrial, and transport.
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Higher Costs:
- U.S.-manufactured components, such as battery cells, are generally more expensive than foreign-made alternatives, affecting project viability and consumer costs.
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Regulatory Complexity:
- The domestic content requirements are relatively new, and regulatory bodies are still learning to implement them effectively, which adds complexity for developers. This complexity also affects the calculation of domestic content levels and the certification process.
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Supply Chain Constraints:
- The gap between demand and supply means that securing domestic content components can be challenging, leading to delays and increased risks in project delivery.
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Technological and Integration Risks:
- Integrating different components, such as AC and DC blocks with energy management systems, poses technological risks and can complicate the compliance process.
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Tariff Risks and Trade Policies:
- The threat of increased tariffs on imported energy storage components can make long-term supply agreements riskier, further emphasizing the need for domestic content.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-challenges-in-meeting-domestic-content-requirements-for-energy-storage/
