In a report jointly published by the Solar Energy Industries Association (SEIA) and Wood Mackenzie on Thursday, it was revealed that the United States anticipates an unprecedented addition of 33 gigawatts (GW) in solar production capacity this year, marking a remarkable 55% surge compared to the previous year. The surge was notably driven by a record installation of residential solar, with 6.5 GW added in the third quarter alone.
The report highlighted that the U.S. solar sector contributed 48% of the new electricity-generating capacity integrated into the grid during the first three quarters of 2023. The growth trajectory remains robust, projecting a 55% expansion in 2023 and a subsequent 10% growth in 2024, according to Michelle Davis, Head of Solar Research at Wood Mackenzie.
However, challenges loom on the horizon for 2024, as alterations to net energy metering policies in California and increased interest rates nationwide are expected to cause a temporary setback before a renewed growth phase in 2025.
California and Texas emerged as frontrunners in solar installations during the third quarter, with a total of 14 states and Puerto Rico collectively adding over 100,663 megawatts of new solar capacity in the same period.
Looking ahead, the report projects that by 2028, solar capacity in the United States is set to reach 377 GW, a substantial increase from the current 161 GW. Despite this optimistic outlook, challenges such as higher financing costs, transformer shortages, and interconnection bottlenecks have impacted the utility-scale segment, witnessing the lowest level of new contracts since 2018.
Wood Mackenzie anticipates an average annual growth of 14% in the U.S. solar industry over the next five years. However, a note of caution was sounded regarding sustained growth in the long term, citing potential impediments such as interconnection bottlenecks and limitations in transmission capacity that could hinder the pace of installations.
