A recent report indicates that since the enactment of the Inflation Reduction Act (IRA) in 2022, solar manufacturing capacity in the United States has nearly quadrupled in two years.
According to the “U.S. Solar Market Insight Q3 2024” report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, U.S. solar manufacturing capacity has exceeded 31 GW, with over 10 GW added in the second quarter of 2024 alone.
The IRA provides significant tax incentives for photovoltaic (PV) module manufacturers, driving rapid capacity expansion. SEIA President and CEO Abigail Ross Hopper stated that the solar industry is translating federal clean energy policy into tangible actions, creating jobs and boosting economic growth, particularly in states like Arizona, Nevada, and Georgia. U.S. solar manufacturing is now at a historic high, and sufficient capacity to meet domestic market demand is expected soon.
The report notes that since the implementation of the IRA, newly connected solar capacity has reached 75 GW, accounting for more than one-third of the total installed PV capacity in the U.S. Texas led the market in the first half of 2024, adding 5.5 GW of capacity, nearly double that of second-place Florida, which managed 2 GW.
However, the residential solar market underperformed, with installations declining by 37% year-on-year, primarily due to market contraction in California. Changes in state policies led to a 36% reduction in residential solar installations. The report predicts that residential solar installations will bottom out this year, declining by 19% nationwide, but are expected to recover in the long term.
The U.S. clean energy transition also faces challenges, including a backlog of projects awaiting grid connection and uncertainties related to the upcoming presidential election. Michelle Davis, Head of Global Solar at Wood Mackenzie, noted that solar industry growth is hindered by broader challenges in the power sector, including project backlogs, equipment shortages, and workforce limitations. Additionally, new tariffs and election-related uncertainties pose further risks.
Despite these challenges, the outlook for the U.S. solar industry remains strong. The report forecasts that annual installations will reach at least 40 GW starting in 2025, with total installed capacity reaching 440 GW by 2029.
