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US solar installations skyrocket in first full year of Inflation Reduction Act
13/3/2024
News
For the first time in history, solar has accounted for over 50% of new electricity capacity added to the US grid, but tumbling prices could undermine the nation’s solar photovoltaic (PV) manufacturing, new analysis has found.
The US solar industry added a record-breaking 32.4 GW of new electric generating capacity in 2023 – a 37% increase from the previous record set in 2021 and a 51% increase from 2022, according to a report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
Solar accounted for 53% of all new electric generating capacity added to the US grid last year. This marks the first time in 80 years that a renewable electricity source has accounted for over 50% of annual capacity additions.
‘If we stay the course with our federal clean energy policies, total solar deployment will quadruple over the next 10 years,’ says SEIA President and Chief Executive Officer Abigail Ross Hopper. ‘The Inflation Reduction Act (IRA) is supercharging solar deployment and having a material impact on our economy, helping America’s solar module manufacturing base grow 89% in 2023.’
The study finds that total US solar capacity is expected to grow to 673 GW by 2034, enough to power more than 100 million homes. The US solar industry currently faces several uncertainties, including policy outcomes associated with the upcoming presidential election. There is a 200 GW difference between the high- and low-case forecasts by 2034.
‘A high case for US solar with increased supply chain stability, more tax credit financing and lower interest rates would increase our outlook 17%,’ says Michelle Davis, Head of Global Solar, Wood Mackenzie and lead author of the report. ‘A low case with supply chain constraints, less tax credit financing and static interest rates would decrease our outlook 24%. Various policy and economic outcomes will have big implications for the US solar industry.’
Solar module manufacturing capacity grew from 8.5 GW to 16.1 GW in 2023. However, the report warns that record-low prices for modules and a tough economic environment could make it difficult for US manufacturers to follow through on announced facilities. In 2023, prices for monofacial and bifacial solar modules fell 26% and 31%, respectively. The US currently does not have any ingot, wafer or cell manufacturing facilities in operation, representing an opportunity for growth.
According to the study, every solar market segment saw year-on-year growth in 2023, bringing total installed solar capacity in the US to 177 GW. The utility-scale sector alone added 22.5 GW of new capacity, while nearly 800,000 Americans added solar to their homes.
The report finds that energy storage use continues to grow across the country. In 2023, solar with storage accounted for 13% of residential installations and 5% of non-residential installations. In 2024, 25% of new residential installations and 10% of non-residential installations will have storage.
