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The US added a record 32.4 gigawatts (GW) of solar capacity in 2023, but 2024 will bring challenges for the industry, according to a new report.
March 5, 2024: This represents a 37% increase from the previous record set in 2021 and a 51% increase from 2022.
This is the first time in 80 years that renewables account for more than half of annual additions to the grid.
According to the US Solar Market Insight 2023 Annual Review released today by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, solar accounted for 53% of all new electricity generation capacity added to the grid last year. This is the first time in 80 years that renewable electricity sources account for more than 50% of annual power additions.
Every segment of the solar market is projected to grow year-over-year to 177 GW of total installed solar capacity in the US in 2023. The utility sector alone added 22.5 GW of new capacity, while nearly 800,000 Americans added solar to their homes.
SEIA President and CEO Abigail Ross Hopper said:
The Inflation Relief Act boosts solar installations and has a significant impact on our economy, helping America’s solar module manufacturing base grow by 89% in 2023.
We must protect and optimize the policies that drive these investments and create jobs, and the payoff could not be higher in the upcoming elections.
December 6, 2023: SEIA and Wood Mackenzie released their report, “US Solar Market Insight Q4 2023,” in which they report that new solar additions totaled 6.5 gigawatts (GW) in the third quarter (Q3) — a 35% year-over-year increase — due to federal clean energy policies. started to catch.
California and Texas led the US in new solar installations in Q3, while Indiana came in third with 663 megawatts (MW) of new capacity. Fourteen states and Puerto Rico installed more than 100 MW of new solar capacity in the third quarter.
Although economic challenges are beginning to affect the solar and storage industries, by 2050 solar energy is still expected to be the largest source of generating capacity on the US grid.
SEIA President and CEO Abigail Ross Hopper said:
Solar remains the fastest-growing energy source in the United States, and despite the challenging economic environment, this growth is expected to continue in the coming years.
To sustain this projected growth, we must modernize regulations and reduce bureaucratic barriers 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 third quarter. However, California’s Public Utilities Commission’s disastrous decision to eliminate the state’s rooftop solar incentives—resulting in an 80% drop in installations—and high U.S. interest rate growth are expected to result in a brief downturn next year before resuming in 2025.
Rising financing costs, transformer shortages and interconnection issues are also affecting the utilities segment, which saw its lowest level of new contracts signed in the quarter since 2018.
However, improvements in the modular supply chain led to a record 12 GW of utility-scale deployment in the first nine months of 2023.
Solar will account for 48% of all new electricity generation capacity in the first three quarters of 2023, bringing the total installed solar capacity in the U.S. to 161 GW at 4.7 million installations. By 2028, US solar capacity is expected to reach 377 GW, enough to power more than 65 million homes.
Michelle Davis, head of solar research at Wood Mackenzie and lead author of the report:
The US solar industry is on a strong growth trajectory, with expectations for 55% growth this year and 10% growth in 2024.
Growth is expected to be slower starting in 2026 as various challenges such as interoperability constraints become more acute. To maximize the value that solar energy brings to an increasingly complex grid, it is critical that the industry continues to innovate.
Interconnection reform, modernizing regulators and increasing storage surcharges will be key tools.
Electrek’s Take
I’m not surprised by record solar capacity in 2023 – thank you, Deinflation Act – but I’m glad to hear it from SEIA. The solar industry is still set to grow in 2024, not as fast as last year.
There are many moving parts in this revolutionary transition to clean energy, and next year the industry and its supply chain will need to recalibrate on some important issues.
There’s nothing he can do about interest rates, and I don’t know how to fix California’s mess. But there are innovative startups coming up with better ways to calibrate power on the grid, and those ideas are being commercialized. As Davis said, interconnection reform and regulatory improvements are needed to ease clean energy bottlenecks. I hope these bottleneck problems will be improved by the government soon.
Read more: Here’s what the US needs to do right now to improve the grid
Photo: A worker watching a sunrise is licensed CC-CC0 1.0 by the US Department of Energy
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