A brand new report from the Photo voltaic Power Industries Affiliation (SEIA) and the Wooden Mackenzie analysis group mentioned the U.S. photo voltaic sector is predicted so as to add a file 33 GW of recent era capability in 2023, a 55% improve from 2022.
The teams mentioned that even with progress anticipated to sluggish over the following 12 months attributable to financial and interconnection challenges, photo voltaic power is predicted to be the most important supply of producing capability on the U.S. energy grid by 2050. The report launched Dec. 7 mentioned that authorities insurance policies supporting solar energy are among the many causes for the business’s rise.
“Photo voltaic stays the fastest-growing power supply in the USA, and regardless of a troublesome financial atmosphere, this progress is predicted to proceed for years to come back,” mentioned SEIA president and CEO Abigail Ross Hopper. “To take care of this forecasted progress, we should modernize laws and cut back bureaucratic roadblocks to make it simpler for clear power firms to take a position capital and create jobs.”
The report mentioned photo voltaic accounted for 48% of all new electrical producing capability within the U.S. via the primary 9 months of this 12 months, with whole put in photo voltaic capability of 161 GW from about 4.7 million installations. The teams mentioned that by 2028, U.S. solar energy era capability is predicted to hit 377 GW.
“Organizations throughout quite a few industries—together with protection, industrial, knowledge heart and healthcare—are leveraging entry to photo voltaic PV [photovoltaic] as a neighborhood supply of sustainable and resilient energy,” mentioned Doug Mackenzie, vice chairman, Power Resilience, for JLL, an organization which focuses on renewable power and sustainability options.
Challenges to Sustained Development
“The U.S. photo voltaic business is on a powerful progress trajectory, with expectations of 55% progress this 12 months and 10% progress in 2024,” mentioned Michelle Davis, head of photo voltaic analysis at Wooden Mackenzie and lead creator of the report. “Development is predicted to be slower beginning in 2026 as numerous challenges like interconnection constraints develop into extra acute. It’s vital that the business proceed to innovate to maximise the worth that photo voltaic brings to an more and more complicated grid. Interconnection reform, regulatory modernization, and rising storage attachment charges shall be key instruments.”
The report’s authors wrote that the “progress outlook for the U.S. photo voltaic business stays robust, averaging 14% yearly over the following 5 years. Nevertheless, sustained progress will develop into more difficult within the longer-term as interconnection bottlenecks and transmission capability suppress the tempo of installations.”
The authors famous that 2024 may very well be more difficult for the sector, partly attributable to coverage adjustments in states comparable to California. SEIA and WoodMac mentioned the residential photo voltaic phase put in a file 210,000 techniques within the July-September interval this 12 months, however adjustments to web power metering coverage in California, which took impact in April, make it much less worthwhile for photo voltaic prospects there to ship energy again to the grid.
Analysts have mentioned the measure reduces the worth of photo voltaic power by 70% to 75% for these prospects, and will increase the payback interval for photo voltaic techniques. A WoodMac evaluation earlier this 12 months mentioned the photo voltaic payback interval in California, which had been 5 to 6 years, will soar to 14 to fifteen years on account of the NEM 3.0 laws. Amir Cohen, common supervisor of SolarEdge Applied sciences North America Photo voltaic Enterprise Unit, in an interview with POWER earlier this 12 months mentioned the affect of how comparable guidelines in different nations impacted the photo voltaic market.
“If power turns into costlier to purchase than it’s worthwhile to promote, it’s more cost effective to retailer your power for private use when the solar goes down,” mentioned Cohen. “What you get is a web metering market shifting to a self-consumption market, through which photo voltaic plus storage turns into the norm.”
Curiosity Charge Impacts
Increased rates of interest, which improve financing prices for solar energy techniques, are also having a unfavorable affect on photo voltaic adoption, notably for the residential market. Thursday’s report mentioned that’s anticipated to result in decrease residential installations subsequent 12 months—off as a lot as 12%—earlier than progress resumes in 2025.
The report mentioned that larger financing prices even have impacted utility-scale photo voltaic, together with transformer shortages and interconnection bottlenecks. The authors mentioned the utility-scale sector not too long ago noticed its lowest degree of recent contracts signed in 1 / 4 since 2018. They famous, although, that an improved provide chain for photo voltaic modules helped help a file 12 GW of utility-scale installations from January via September of this 12 months.
“The utility-scale phase put in simply over 4 GW in Q3 2023, representing 58% progress over Q3 2022, when provide chain constraints have been severely suppressing installations, and flat in comparison with final quarter,” the report mentioned. “This phase has already put in almost as a lot capability via the third quarter [of 2023] as all of 2022, principally attributable to abating provide chain constraints.”
—Darrell Proctor is a senior affiliate editor for POWER (@POWERmagazine).
