Thanks to investments gained via the Biden administration’s Inflation Reduction Act (IRA), the solar power sector in the United States may add a record-breaking 32 gigawatts (GW) of production capacity before the end of 2023. This brings the industry’s capacity up by over 50% from where it was this time last year.
According to a joint report recently released by the Solar Energy Industries Association (SEIA) and global research consultancy Wood Mackenzie, the industry expects the total solar capacity to increase from the current total of 153 GW to 2028 come 2028.
However, this is dependent on how soon the issues that hit supply chains throughout the world during the height of the COVID-19 pandemic are resolved, and if harsh trade policies could be relaxed by the relevant government authorities.
How Has the IRA Helped Solar in the US?
Under the IRA which was ratified in 2022, the US government put around $370 billion towards the resolution of climate change issues and the ongoing shift towards cleanly produced and sustainable energy. Such initiatives that have benefited from the IRA within the first year of its implementation are projects related to solar and wind energy production, storage, and generation.
Indeed, Michelle Davis, Wood Mackenzie’s head of global solar, believes that the IRA has fueled optimism within the solar power sector. Likewise, Wood Mackenzie analysts believe that the further infusion of investments into the domestic manufacturing sector will enable domestic solar module producers to grow exponentially within the next three years, provided that new facilities are opened for operation.
Davis also said that the growing number of companies announcing plans for the domestic production of solar modules will lead to a greatly stabilized supply of such equipment in the years to come. However, these companies need to be able to implement their plans for this to come to pass.
To date, those leading the way with new capacity additions done in the second quarter of this year are the residential and utility-scale markets, particularly in California where customers scrambled to put in solar systems prior to the implementation of net metering regulations.
