September 13, 2023
The United States is on the cusp of achieving a monumental milestone in its journey towards sustainable energy. The year 2023 is poised to witness an extraordinary record-breaking surge in solar capacity growth, with an estimated 32 gigawatts (GW) of new solar capacity expected to be added on a direct-current basis. This remarkable leap, as predicted by a report jointly released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, surpasses the 20.2 GW added in the previous year and is primarily fueled by utility-scale photovoltaic (PV) projects.
The report, aptly titled “Solar Market Insight Q3 2023,” highlights the impressive resurgence within the utility-scale segment. It is estimated that this year, over 20 GW of new solar capacity will be contributed by utility-scale PV projects, marking a substantial increase from the 11.8 GW added in 2022. This resurgence signifies a triumph over the supply chain constraints and high prices for imported equipment that impeded progress in previous years.
Solar energy continues to ascend to the forefront of the United States energy landscape, constituting a staggering 45% of all new electricity-generating capacity added to the national grid in the first half of 2023. This growth is especially encouraging, as it signals the solar industry’s ability to recover from the supply chain disruptions that plagued its development in the past.
At the heart of this solar revolution lies the Inflation Reduction Act (IRA), a groundbreaking climate law passed in 2022. The IRA is anticipated to play a pivotal role in propelling further expansion within the solar sector. According to Wood Mackenzie’s projections, total solar capacity in the U.S. is poised to skyrocket from the current 153 GW to an astounding 375 GW by 2028. This projection encompasses an additional 172 GW of utility PV capacity, even in the face of challenges such as opposition from local communities, high interconnection costs, and labor shortages.
Abigail Ross Hopper, CEO of SEIA, commented on this unprecedented growth, stating, “The United States is now a dominant player in the global clean energy economy and states like Florida, Texas, Ohio, and Georgia are at the forefront of this job growth and economic prosperity.”
While the trajectory of the solar industry is undeniably promising, the report also casts light on some of the hurdles that still loom large. Approximately 80% of solar modules installed in the U.S. originate from countries like Cambodia, Malaysia, Thailand, Vietnam, Germany, and India. Imports from these nations have more than doubled in the first half of 2023 compared to the previous year.
One significant challenge that has emerged is the Uyghur Forced Labour Protection Act (UFLPA), which was enacted in June 2022. This legislation seeks to address human rights abuses in China’s Xinjiang region, a key supply source for polysilicon and other critical components used in solar panels. As a consequence, U.S. Customs and Border Protection (CBP) has detained shipments of electronics, cells, and modules, resulting in disruptions across the supply chain.
In response to these challenges, developers have been diligently adapting to diversify their supply chains and explore domestic sources of solar products. Additionally, they are turning to Chinese-branded manufacturers in Southeast Asia who comply with U.S. trade laws. However, those who attempt to evade U.S. tariffs on Chinese cells and modules could face substantial duties, with rates as high as 254% set to take effect on June 6, 2024, unless importers meet specific exemption criteria.
“The UFLPA continues to be the most limiting factor for utility-scale solar buildout, but on balance, we expect there will be sufficient supply to serve the market by 2025,” the report cautiously suggests. However, it also highlights that the law, combined with impending tariffs, may result in “more expensive solar equipment for the U.S. market, at least in the near term.”
Despite these challenges, a surge of new domestic manufacturing investments is expected to bolster supply conditions in the coming years. The report boldly asserts that if these factory announcements materialize, the output of U.S. solar module manufacturing will swell to be “ten times greater than it is today” by 2026.
However, it’s essential to recognize that the full benefits of the IRA have yet to materialize. The report identifies that the IRA, although instilling optimism within the solar industry since its passage, has not yet propelled a wave of solar projects through the final stages of development, resulting in a plateauing pipeline growth. This stagnation is not due to a lack of interest in project development but rather a complex interplay of factors, including high-interest rates, elevated hardware and labor costs, and increased local opposition to clean energy projects.
The report underscores that uncertainty around qualifying for and claiming IRA benefits exacerbates these challenges. While the Department of Treasury has offered some guidance, it has left critical questions unanswered, leaving developers in limbo.
Michelle Davis, Head of Global Solar at Wood Mackenzie, remarked, “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 a more stable solar module supply in the future. Now the challenge becomes implementation – the industry is waiting for clarity on several IRA provisions before moving forward with solar investments.”
In a promising turn of events, the supply chain relief that began to manifest in the U.S. solar industry has resulted in a surge of solar installations, and more recently, the solar and energy storage industries have combined to add approximately $100 billion in economic activity to the U.S. economy, all fueled by the incentives provided by the IRA.
Amidst this flourishing landscape of solar energy expansion, one name stands out as the No. 1 Preferred Installer in Texas and Oklahoma: Renewables Hub.
Renewables Hub: Pioneering a Sustainable Future
As the U.S. solar industry experiences unprecedented growth and change, the role of solar installers and service providers becomes increasingly critical. Among these vital players, Renewables Hub has emerged as the leading and preferred installer in the vibrant solar markets of Texas and Oklahoma.
Texas: The Lone Star State Goes Solar
Renewables Hub’s ascendancy in Texas is nothing short of remarkable. The Lone Star State, known for its vast landscapes and abundant sunshine, has embraced solar energy with open arms. Texas’s commitment to solar power is evidenced by its substantial contribution to the national solar capacity growth. Renewables Hub has been at the forefront of this solar revolution, with a steadfast dedication to delivering top-tier solar installations and services.
With a team of experienced and certified professionals, Renewables Hub has successfully executed many solar projects across Texas. From residential rooftop installations to expansive utility-scale solar farms, Renewables Hub has left an indelible mark on the Texas solar landscape. Their commitment to quality, efficiency, and sustainability has earned them the trust of homeowners, businesses, and communities across the state.
Texas, renowned for its abundant land, is also a hotspot for utility-scale solar developments. Renewables Hub’s expertise in this arena has played a pivotal role in accelerating the growth of utility-scale solar projects in the state. They have not only overcome supply chain challenges but have also worked diligently to meet the rising demand for solar energy, contributing