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After contracting slightly in 2022, the U.S. solar market is on track to break some records this year. It’s also slated to grow even more in the coming years as more people, businesses and governments leverage the benefits of solar power.
The US solar industry installed 5.6 gigawatts-direct current (GWdc) of capacity during the second quarter of 2023, according to the latest SEIA/Wood Mackenzie Power & Renewables U.S. Solar Market Insight quarterly report. This represented a 20% increase compared to the same quarter last year.
“2023 volumes are set to grow year-over-year, reversing the contraction the industry experienced in 2022,” says SEIA, which notes that the industry continues to recover slowly from the supply constraints experienced in 2022.
“There is a cumulative total of 153 gigawatts direct current (GWdc) of solar capacity installed through the first half of 2023, and we expect this figure to grow to 375 GWdc by the end of 2028,” SEIA reports. “Even with the current challenges facing this market, the solar industry is looking at many years of sustained, strong growth.”
45% of New Capacity is Solar-Generated
Overall, photovoltaic solar (PV) accounted for 54% of all new electricity-generating capacity additions in the first quarter of 2023. Among the other key points included in the report:
- Solar accounted for 45% of all new electricity-generating capacity added to the U.S. grid in the first half of 2023.
- The residential segment bounced back from a slight dip last quarter to set a quarterly record at 1.8 GWdc of installations during the second quarter. “As the industry anticipated, California installations grew in advance of the mid-April change from net metering to net billing,” SEIA reports. “We expect this installation surge to continue through the third quarter and begin to wane in the fourth quarter.”
- The commercial solar segment installed 345 MWdc during the second quarter. This represents a 9% decline compared to last year at the same time and 20% less than the first quarter of this year. “While capacity decreased quarter-over-quarter, the total number of projects installed increased 7%, indicating relatively stable volumes for the segment,” SEIA states.
- In the year since the Inflation Reduction Act (IRA) passed, solar module manufacturers have announced approximately three dozen capacity additions. If all of these plans materialize, SEIA says the US (including Puerto Rico) will increase its total module manufacturing capacity by a significant order of magnitude by 2026—from 10.6 GW to 108.5 GW.
“The United States is now a dominant player in the global clean energy economy, and states like Florida, Texas, Ohio and Georgia are at the forefront of this job growth and economic prosperity,” said SEIA president and CEO Abigail Ross Hopper in a press release. “The solar and storage industry is delivering abundant clean energy that is generating tens of billions of dollars of private investment, and this is just the tip of the iceberg.”
What’s Next?
After contracting by 13% in 2022, the U.S. solar industry is now on track to grow by 52% this year. “A record 20 GWdc will be installed over the second half of the year, surpassing every annual total prior to 2021,” Wood McKenzie predicts in the report. “Modest growth is expected across distributed solar, while the utility segment is set to almost double compared to last year.”
Looking further out, Wood McKenzie’s five-year outlook predicts that annual growth in the domestic solar industry will average 15%. Implementation of the IRA has been slow and complicated, the firm adds, “but the long-term policy certainty provided by the legislation continues to drive our expectations for double-digit growth in the solar industry.”
