More than half of the electricity generating capacity added to the US grid in 2023 was solar power, according to a new report released by the Solar Energy Industries Association and Wood Mackenzie. This is the first time in 80 years that renewable energy sources accounted for over half of the additions to grid capacity in the United States.
The solar industry attributed the growth to the significant incentives included in the federal Inflation Reduction Act. This was the first full year since the passing of the IRA, which carved out nearly $369 billion in federal funding for investment in manufacturing and production of clean energy technologies, as well as a major tax credit for the installation of rooftop solar panel systems.
The year wrought challenges for the solar industry as well. California’s solar market was crushed (contracting 75% by some estimates) under a new, more restrictive net metering policy. High interest rates made financing solar panel systems hard for residents across the US, and reports circulated late in the year that some solar companies were teetering on the edge of bankruptcy.
With solar payback periods potentially increasing in key states, it’s uncertain whether rooftop installation will remain popular — or if solar leases, power purchase agreements or community solar programs will grow in their stead.
A sunny forecast for solar power?
According to the SEIA and Wood Mackenzie, solar capacity is expected to be able to power 100 million homes by 2034.
“If we stay the course with our federal clean energy policies, total solar deployment will quadruple over the next 10 years,” said SEIA president and CEO Abigail Ross Hopper.
The solar industry also remains wary about the outcome of this year’s elections. A change in administration in Washington could dramatically shift the federal government’s favorable view toward renewable energy.
