US Solar Witnesses Over 50% New Capacity Addition To The Grid: Report

US Solar Witness Over 50% New Capacity Addition To The Grid: Report

A recent report by US-based think tank Wood Mackenzie and Solar Energy Industries Association (SEIA) estimated a 37% increase in new electric generating capacity in 2023 in the United States. This indicated an increase from the previous record set in 2021 and a 51% increase from 2022.

According to the US Solar Market Insight 2023 year-in-review by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, solar accounts for 53% of all new electric generating capacity added to the grid last year. This marks a 50% increase in renewable electricity sources for the first time in 80 years. This renewable electricity source accounts 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 ten years,” said SEIA president and CEO Abigail Ross Hopper. “The Inflation Reduction Act is supercharging solar deployment and having a material impact on our economy, helping America’s solar module manufacturing base grow 89% in 2023. We must protect and optimize the policies that are driving these investments and creating jobs, and the stakes in the upcoming election couldn’t be higher.”

Total US solar capacity is expected to grow to 673 GW by 2034, enough to power more than 100 million homes. The report includes forecast scenarios that show how policy and economic factors could impact the solar market. The US solar industry currently faces several uncertainties, including policy outcomes associated with the upcoming presidential election. The scenarios consider various factors, including interest rates, tax credit financing, trade policy, supply chain availability, and interconnection, amongst others, over the next 10 years. A 200 GW difference exists 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 by 17%,” said Michelle Davis, head of global solar at 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, 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, monofacial and bifacial solar module prices fell 26% and 31%, respectively. The United States currently does not have any ingot, wafer, or cell manufacturing facilities in operation, representing an opportunity for growth.

Every solar market segment saw year-over-year growth in 2023, bringing the total installed solar capacity in the United States 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.
Energy storage use continues to grow across the country. In 2023, solar + 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.

Texas led the nation for new solar installations with 6.5 GW, eclipsing California for the second time in the last three years. California’s residential solar market will struggle in 2024 after changes to net metering policies take effect, contributing to a projected 36% decline across all segments in the state.

Colorado and Ohio were among the top 10 solar states in 2023 for the first time in over a decade, while Wisconsin made its debut in the top 10. Over half of US states have 1 GW of installed solar capacity.