Solar Expected to Bounce Back From Slowdown

According to the “U.S. Solar Market Insight 2022 Year in Review” report, released this March by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the United States added 20.2 gigawatts (GW) of new solar capacity in 2022, a 16 percent decrease from 2021. “This was due in large part to an investigation into new anti-circumvention tariffs by the U.S. Department of Commerce, as well as equipment detainments by Customs and Border Protection under the Uyghur Forced Labor Prevention Act,” said the report.

SEIA has a goal of achieving 30 percent of U.S. electricity generation by 2030 and works with its 1,000 member companies and other strategic partners in its efforts to increase solar adoption and usage. The report noted that utility-scale installations fell by 31 percent year-over-year to 11.8 GW, the sector’s lowest total since before the COVID-19 pandemic. Commercial and community solar installations also fell by six percent and 16 percent, respectively. Backlogs for connecting new solar projects to the electric grid continue to limit deployment in each market segment. Despite the recent downtrend, the report’s projections for 2023 and 2024 show a broad market recovery, with growth across all sectors averaging 19 percent per year until 2027.

“Over 1.8 GW of new solar module manufacturing capacity came online in the U.S. in 2022, bringing total domestic manufacturing capacity to 9 GW,” said the report. “Incentives in the IRA have sparked several new solar manufacturing investments that will bring total domestic capacity to 25 GW by the end of 2023 if all the announcements materialize. It appears, however, that domestic module producers will rely on cell imports for a few more years as domestic cell manufacturers take time to come online.”

“While the solar and storage industry acts swiftly on supply chains and building a stronger domestic manufacturing base, ongoing threats of steep tariffs are holding back the potential of the historic Inflation Reduction Act,” said Abigail Ross Hopper, president and CEO of SEIA.

“While 2022 was a tough year for the solar industry, we do expect some of the supply chain issues to ease, propelling 2023 growth to 41%,” said Michelle Davis, principal analyst at Wood Mackenzie, and lead author of the report. “With major uncertainties ahead of the industry, our high- and low-case scenarios can help the industry benchmark potential outcomes. In each scenario, there is roughly 20 GW of upside or downside risk over the next five years — the same amount of capacity installed last year.”

According to the report, the residential solar market experienced a 40 percent increase in installed solar capacity in 2022, and now six percent of all homes in the United States have solar. By 2030, that number is expected to grow to 15 percent.

“In 2022, 783 MW of new residential, commercial and community solar capacity deployed was paired with energy storage systems, a new record,” said the report. “By 2027, 33% of new residential solar capacity and 20% of new commercial and community solar capacity will be paired with storage.”

The report also noted that, even as supply chain constraints slowed the market, solar accounted for 50 percent of all new electric generating capacity additions in 2022. And, today, solar accounts for almost five percent of U.S. electricity generation.


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