U.S. Photovoltaic Industry Expected to Continue Growth in 2024, Benefiting from Policy Support

According to the latest report released by Wood Mackenzie and the Solar Energy Industries Association (SEIA), the U.S. photovoltaic (PV) industry is projected to maintain strong growth momentum in 2024. In 2023, PV accounted for over 50% of the newly added grid capacity. This growth is largely attributed to the generous tax credits provided by President Biden’s Inflation Reduction Act (IRA) for clean energy technologies such as electric vehicles, wind, and solar power.

Industry Expectations and Growth Forecast

The report indicates that the U.S. PV industry is expected to add an additional 5 GW of installed capacity in 2024. The growth rates for the commercial, community, and utility-scale segments are projected to be 19%, 15%, and 26%, respectively. Michelle Davis, Global Solar Director at Wood Mackenzie, stated that if the supply chain becomes more stable, tax credit financing increases, and interest rates decrease, PV installations are expected to grow by 17%. Conversely, if the supply chain remains constrained, tax credit financing decreases, and interest rates stay the same, installations could decrease by 24%.

2023 Growth Review

In 2023, the U.S. PV industry added 32.4 GW of installed capacity, a 51% increase from 2022. This significant growth was primarily due to the completion of backlogged projects and improved supply chain stability. Trade actions in 2022, such as tariffs on imports from certain Southeast Asian countries and concerns about forced labor, had previously hindered the import of PV equipment.

Regional Growth Highlights

In 2023, Texas led the nation in total PV capacity due to an increase in utility-scale PV installations, with a 77% growth from 2022. California excelled in residential and commercial installations as consumers rushed to take advantage of the state's current net metering rules before the new net metering rules (NEM 3.0) took effect in April 2023. However, the report predicts that with the transition to NEM 3.0, residential PV installations in California are expected to decline by 13% in 2024.

Impact of Policy Support

The Inflation Reduction Act (IRA) has played a crucial role in driving the growth of the PV industry. The act not only provides investment tax credits (ITC) for newly installed PV systems but also supports the promotion and application of clean energy through various policy measures. These measures include, but are not limited to:

• Providing investment tax credits (ITC) for new PV installations

• Encouraging commercial and industrial users to adopt solar technology

• Supporting the development of community solar projects

• Promoting the implementation of utility-scale solar projects

Future Outlook

Looking ahead to 2024, the U.S. PV industry is expected to continue its strong growth momentum, driven by both policy support and market demand. With technological advancements and cost reductions, more households and businesses are likely to turn to solar energy to achieve energy independence and environmental sustainability.

However, challenges such as supply chain bottlenecks, policy changes, and market fluctuations still exist. To ensure sustained growth, the PV industry needs to enhance supply chain management, optimize financing structures, and proactively address market and policy changes.

Overall, the U.S. PV industry is set to benefit from ongoing policy support and growing market demand in 2024, with a promising outlook. We look forward to the concerted efforts of all industry stakeholders to overcome challenges and ensure the long-term healthy development of the PV industry.

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