Solar power accounted for most of the capacity the country added to its electric grids last year. This feat marks the first time since World War II, when hydropower was booming, that a renewable power source has accounted for more than half of the nation’s energy additions.
“It’s really monumental,” said Shawn Rumery, senior director of research at the Solar Energy Industries Association, or SEIA. The trade group announced the 2023 numbers in a report released today with the analytics firm Wood MacKenzie. The 32.4 gigawatts that came online in the United States last year, the previous high of 23.6 gigawatts recorded in 2021 and accounted for 53 percent of new capacity. Natural gas was next in line at a distant 18 percent.
SEIA calls 2023 the best year for renewable energy since World War II. Texas and California led a solar boom driven mostly by utility scale installations, which jumped 77 percent year-over-year to 22.5 gigawatts. The residential and commercial sectors also achieved new milestones. Only the relatively nascent community solar market missed its previous mark, though not by much, Rumery said. Overall, he calls it a “near record year in the industry.”
One factor driving all that growth was the easing of supply chain constraints, which had slowed the delivery of solar panels. The problem arose in early 2022 to a small manufacturer in California, Auxin Solar, filed a petition with the Commerce Department accusing Chinese companies of circumventing U.S. tariffs by shipping panels through Southeast Asia. The government largely sided with Auxinand new rates will come into effect in June.
The dispute “really set back a lot of utility-scale projects,” Rumery said. But, he explained, solar developers found solutions that helped fuel such strong 2023 growth, when projects expected to be completed in 2022 were finally completed. While the boost from delayed installations will dissipate in the coming years, and residential solar faces headwinds due to changes in net metering rules, experts generally expect renewable energy to remain on its circuit.
“It will most likely continue because solar and wind are now very well established,” says Rob Stoner, director of the MIT Energy Initiative. “Solar costs continue to fall far below where we ever thought they would.”
Despite its rapid rise, solar still makes up just 5 percent of the U.S. electricity mix. But today’s report projects that the country will add nearly 500 gigawatts of solar over the next decade. However, the authors caution that deployment could shift dramatically depending on how policy and the market progress. Their bull scenario would see as much as a 17 percent increase from that base case, while their bearish outlook predicts a 24 percent decline — swings that could account for about 200 gigawatts of capacity.
Rumery says he will monitor the extent to which companies benefit from funding from the Inflation Reduction Act, which includes significant incentives for renewable energy deployment. So far, interest in solar energy appears to be strong, with one score pegging utility investment at $53 billion in 2023. But according to Stoner, the biggest open question is how quickly projects can connect to the grid.
“Interconnection times nationally are very long for utility scale,” he said. “It’s a big problem.”
Rumery said companies expect wait times to grow from about five years to as long as a decade or more. He adds interest rates and state-level policies such as net metering rates to the list of factors that could shape the future of solar power. But overall, he said, there is only one direction the industry is going.
“We certainly expect the solar industry to grow,” he said. The question is just by how much.
