Wood Mackenzie and SEIA Release Report on “Exploding” U.S. Solar Industry

Sept. 8, 2023
In 2023, the solar industry is expected to add 32 GW of new capacity, representing a 52% increase over 2022, and the total operating capacity could expand to 375 GW by 2028

Wood Mackenzie and the Solar Energy Industries Association (SEIA) have released a new U.S. Solar Market Insight Q3 2023 report highlighting the growth of the United States’ solar industry.

According to the report, the solar market has been severely hampered in recent years due to supply chain issues created by the COVID-19 pandemic and restrictive trade policies. But, as policies such as the Inflation Reduction Act have been established, these challenges have started to subside.

For example, in 2023, the U.S. solar industry expects to add 32 GW of new capacity, representing a 52% increase from 2022. In total, Wood Mackenzie predicts the total operating solar capacity will expand from its present 153 GW to nearly 375 GW by 2028.

“The United States is now a dominant player in the global clean energy economy,” said SEIA president and CEO Abigail Ross Hopper. “The solar and storage industry is delivering abundant clean energy that is generating tens of billions of dollars of private investment, and this is just the tip of the iceberg.”

Also contributing to improving the condition of the supply chain since the pandemic is the surge of new domestic manufacturing investments. If these factory announcements become fully commissioned, over the next three years, the U.S. solar module manufacturing output will be ten times greater than the current output level.

Other significant contributors were the utility-scale and residential solar markets, which were trailblazers in adding new capacity during Q2. In total, the utility-scale market grew by 3.3 GW, and the residential market grew by 1.8 GW. According to Wood Mackenzie, this marks the largest quarter of growth for residential solar in U.S. history. 

While most markets are seeing growth, the commercial solar market did experience a decline during Q2. This can be attributed to project interconnection backlogs and a hesitancy to execute projects due to a lack of clarity on the Inflation Reduction Act’s tax credit adders.

“In the year since its passage, the IRA has undoubtedly caused a wave of optimism across the solar industry. Announcements for domestic module manufacturing have exploded, promising more stable solar module supply in the future,” said Michelle Davis, Head of Global Solar at Wood Mackenzie. “Now the challenge becomes implementation — the industry is waiting for clarity on several IRA provisions before moving forward with solar investments.”

Despite this, increasing energy prices are still motivating states to continue investing in commercial solar, and the sector is expected to grow by 11% in 2023.