Solar Sizzles in US Industry Poised for Continued Growth in 2024

The solar industry in the US is set to maintain its upward trajectory in 2024, building upon a year where it contributed over 50% of new electricity capacity additions to the grid.

The solar industry in the United States is set to maintain its upward trajectory in 2024, building upon a year where it contributed over 50% of new electricity capacity additions to the grid.

A recent report jointly published by Wood Mackenzie and the Solar Energy Industries Association underscores the sector’s potential, buoyed by various factors including government incentives and increasing supply chain stability.

Since the inception of President Joe Biden’s Inflation Reduction Act, companies and residents alike have sought to leverage the generous tax credits provided for electric vehicles (EVs) and clean energy technologies such as wind and solar farms.

Michelle Davis, the head of Global Solar at Wood Mackenzie and the lead author of the report, highlighted the potential scenarios, stating, “A high case for U.S. solar with increased supply chain stability, more tax credit financing and lower interest rates would increase our (solar installation) outlook (by) 17%. A low case with supply chain constraints, less tax credit financing and static interest rates would decrease our outlook (by) 24%.”

Projections indicate that an additional five gigawatts (GW) of solar capacity could be installed in 2024 compared to the previous year. Growth expectations vary across segments, with commercial, community, and utility-scale installations anticipated to grow by 19%, 15%, and 26%, respectively.

The surge in solar capacity witnessed in 2023, which amounted to 32.4 GW, marked a 51% increase from the previous year. This remarkable growth was primarily attributed to the improving stability of the supply chain as a backlog of projects reached completion. Challenges faced in 2022, including tariffs on imports from certain Southeast Asian countries and concerns regarding forced labor practices, had hindered solar imports.

Texas emerged as a frontrunner in total solar capacity in 2023, experiencing a significant uptick in utility-scale solar installations, which soared by 77% compared to 2022. Conversely, California led the charge in residential and commercial installations during the same period. Consumers rushed to capitalize on the state’s existing net metering rules before the transition to new net billing rules, known as NEM 3.0, scheduled for April of this year.

However, the report suggests a potential decline of 13% in residential solar installations in California for 2024 due to the transition to NEM 3.0. Additionally, higher interest rates are expected to dampen solar growth in other states. Despite these challenges, the overall outlook remains positive, with the industry poised to continue its upward trajectory fueled by ongoing innovation and supportive policies.

The collaborative efforts between industry stakeholders, government initiatives, and advancements in technology are instrumental in driving the U.S. solar industry forward. As the world increasingly pivots towards renewable energy sources, the United States stands at the forefront, showcasing its commitment to sustainability and energy independence.