Solar industry set for a record 2023 despite economic challenges
According to the Solar Energy Industries Association (SEIA), the third quarter of 2023 saw 6.5 gigawatts (GW) of new solar generating capacity added to the United States, setting things up for a banner year of 33 GW overall of new solar capacity.
For perspective, that means that solar installations in Q3 increased 35 percent year over year – something SEIA credited to federal clean energy policies taking root. At this point, solar represented 48 percent of all new electric generating capacity additions in the first three quarters of 2023. The residential solar segment itself installed a record 210,000 systems in Q3.
“Solar remains the fastest-growing energy source in the United States, and despite a difficult economic environment, this growth is expected to continue for years to come,” Abigail Ross Hopper, SEIA president and CEO, said. “To maintain this forecasted growth, we must modernize regulations and reduce bureaucratic roadblocks to make it easier for clean energy companies to invest capital and create jobs.”
Some economic challenges are beginning to mount that could stunt the industry’s tailwinds, though, according to the SEIA and Wood Mackenzie. Elevated financing costs, transformer shortages and interconnection bottlenecks are hitting the utility-scale segment, resulting in the lowest level of new contracts signed in a quarter since 2018. While some improvements to the module supply chain boosted utility-scale deployment in the first parts of 2023, overall growth for the industry is expected to slow starting in 2026.
Despite this, SEIA and Wood Mackenzie researchers noted that total installed solar capacity has reached 161 GW to date, and by 2028, solar capacity could reach as much as 377 GW. In fact, by 2050, solar is expected to become the largest source of generating capacity on the U.S. grid.
