But economic challenges mount WASHINGTON, D.C. — The U.S. solar industry added 6.5 gigawatts (GW) of new electric generating capacity in the third quarter of this year, a 35 percent year-over-year jump boosted by federal clean-energy policies. As a result of this growth, the country is expected to add a record 33 GW of solar […]
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But economic challenges mount
WASHINGTON, D.C. — The U.S. solar industry added 6.5 gigawatts (GW) of new electric generating capacity in the third quarter of this year, a 35 percent year-over-year jump boosted by federal clean-energy policies.
As a result of this growth, the country is expected to add a record 33 GW of solar capacity in 2023, according to the U.S. Solar Market Insight Q4 2023 report released on Dec. 7 by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. While economic challenges are starting to affect the solar and storage industry, by 2050, solar is expected to be the largest source of generating capacity on the U.S. grid, the association contends.
“Solar remains the fastest-growing energy source in the United States, and despite a difficult economic environment, this growth is expected to continue for years to come,” SEIA president and CEO Abigail Ross Hopper said in the report. “To maintain this forecasted growth, we must modernize regulations and reduce bureaucratic roadblocks to make it easier for clean energy companies to invest capital and create jobs.”
The residential solar segment installed a record 210,000 systems in the U.S. in the third quarter. However, changes to net-energy metering policy in California and elevated interest rates across the U.S. are expected to lead to a brief decline next year before growth resumes in 2025, per the report.
Elevated financing costs, transformer shortages, and interconnection bottlenecks are also impacting the utility-scale segment, which saw its lowest level of new contracts signed in a quarter since 2018, the SEIA said. However, improvements in the module supply chain have led to a record 12 GW of utility-scale deployment in the first nine months of 2023.
Solar accounts for 48 percent of all new electric generating capacity additions in the first three quarters of 2023, bringing total installed solar capacity in the U.S. to 161 GW across 4.7 million installations. By 2028, solar capacity in the nation is expected to reach 377 GW, enough to power more than 65 million homes, per the SEIA.
“The U.S. solar industry is on a strong growth trajectory, with expectations of 55 percent growth this year and 10 percent growth in 2024,” said Michelle Davis, head of solar research at Wood Mackenzie and lead author of the report. “Growth is expected to be slower starting in 2026 as various challenges like interconnection constraints become more acute. It’s critical that the industry continue to innovate to maximize the value that solar brings to an increasingly complex grid. Interconnection reform, regulatory modernization, and increasing storage attachment rates will be key tools.”
California and Texas led the nation for new solar installations in the third quarter, but Indiana ranked third with 663 megawatts (MW) of new capacity as several large utility-scale projects came online. Fourteen states and Puerto Rico installed more than 100 MW of new solar capacity in the latest quarter.
Founded in 1974, the SEIA is the national trade association for the solar and solar-plus storage industries.
Wood Mackenzie calls itself “the global insight business for renewables, energy and natural resources.”