U.S Solar Market Registers Best First Quarter in Industry History
The US solar industry's first quarter success, marked by 6.1 GW of installed solar capacity, underscores the significant growth potential of the sector. Wood Mackenzie forecasts that the solar market will expand threefold by 2028, resulting in a total installed solar capacity of 378 GW. The IRA has played a key role in stimulating growth, prompting a surge of new manufacturing announcements. Domestic module capacity is projected to increase from under 9 GW to over 60 GW by 2026. Currently, at least 16 GW of module manufacturing facilities are under construction.
The IRA's introduction has also led to an upswing in manufacturing activities, particularly due to the implementation of new credits that supplement the solar Investment Tax Credit. These credits, including domestic content, energy communities, and low-income adder credits, offer incentives for solar and storage investment in underserved communities.
While the IRA has already spurred significant investments in solar manufacturing and deployment, certain challenges persist. The complex rules surrounding compliance with the domestic content adder credits and the lack of specific directions for the residential market adds further ambiguity to this segment.
Abigail Ross Hopper, SEIA president and CEO states:
“As the Inflation Reduction Act begins to flex its muscle and drive demand, the U.S. solar and storage industry is eagerly awaiting further guidance on some of the most impactful pieces of the law,”
Despite rising interest rates and economic headwinds, the residential segment installed 1.6 GW of solar capacity, representing a 30% increase compared to Q1 of the previous year. The residential market is expected to add 36 GW of solar capacity over the next five years, growing at an average annual rate of 6%. The commercial market also achieved a record first quarter, installing 391 MW and projecting a 12% growth in 2023.
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