Updated December 11, 2023
The U.S. solar industry is gearing up for a momentous transformation in 2023, poised to increase its solar capacity by an impressive 52% when compared to the preceding year, resulting in a groundbreaking addition of 32 gigawatts. These remarkable statistics have been unveiled in the U.S. Solar Market Insight Q3 2023 report, jointly published by the distinguished Solar Energy Industries Association (SEIA) and the renowned research authority, Wood Mackenzie.
The report underscores the remarkable resurgence of the solar industry after facing a series of challenges stemming from disruptions in the supply chain caused by the global COVID-19 pandemic. Furthermore, the Inflation Reduction Act has emerged as a pivotal driver, offering a slew of novel incentives and funding opportunities set to propel the industry to new heights.
The expert insights from Wood Mackenzie depict a promising trajectory. Their projections indicate that the total operational solar capacity is anticipated to experience a substantial surge, escalating from the current 153 gigawatts to an impressive 375 gigawatts by 2028. Wood Mackenzie, a leader in global research and consultancy in renewables, energy, and natural resources, stands at the forefront of this progress.
"In the year since its enactment, the Inflation Reduction Act has undeniably sparked a surge of optimism within the solar industry. The landscape of domestic module manufacturing is rife with promise, assuring a more stable and consistent supply of solar modules in the times ahead," enthused Michelle Davis, the distinguished Head of Global Solar at Wood Mackenzie. She emphasized, "Now, the challenge shifts towards execution, with the industry eagerly awaiting clarity on various provisions of the Inflation Reduction Act before advancing with solar investments."
The influx of investments in domestic manufacturing holds the potential to revolutionize supply conditions in the years to come. It is anticipated that solar module manufacturing output could surge to ten times its current capacity by 2026 if factory announcements materialize as anticipated.
One area of this compelling narrative is the burgeoning residential solar market, which recently experienced its most significant quarter of expansion in the second quarter of this year. The surge was partly driven by a rush of customers in California to install solar systems before changes to the net metering rules took effect. During this period, the residential and utility-scale markets witnessed substantial growth, amounting to 1.8 gigawatts and 3.3 gigawatts, respectively.
Beyond California, Florida has emerged as a significant player in the solar industry in 2023, installing an impressive 2.5 gigawatts of new capacity in the first half of the year. This figure is 52% higher than California, the next highest state, and represents a record high for Florida in terms of annual installations.
However, the commercial market witnessed a decline during the same three-month period, potentially due to a backlog of project interconnections and the need for a clearer understanding of the tax credits offered by the Inflation Reduction Act.
SEIA's President and CEO, Abigail Ross Hopper, celebrated the U.S.'s dominant position in the global clean energy economy, with states like Florida, Texas, Ohio, and Georgia leading the way in job growth and economic prosperity. Hopper stated,
"The solar and storage industry is delivering abundant clean energy, generating tens of billions of dollars in private investments. This is just the beginning of an incredible journey."
The solar industry's momentum is undeniable, and the time to engage is now.