According to the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the United States saw a total installation of 32.4GWdc of solar power last year, marking a record-breaking year for all segments except community solar.
As per the US Solar Market Insight report jointly released by the two organizations, the United States installed 32.4GWdc of solar capacity in 2023, marking a remarkable 51% year-on-year growth. This not only represented the industry’s most significant year to date but also surpassed the milestone of 30GWdc for the first time. Solar energy also contributed to 53% of all new electricity-generating capacity integrated into the US grid in 2023, accounting for over half of the new generating capacity for the first time.
All sectors of the solar industry experienced expansion. Specifically, the residential sector achieved a new milestone by installing 6.8GWdc in 2023, marking a 13% increase from the previous year. Nevertheless, residential installations faced a decline both quarterly and annually in the fourth quarter of 2023, as customers hurried to benefit from more advantageous net metering regulations before the transition to net billing in April 2023. The upsurge in California compensated for decreases in other states primarily caused by rises in interest rates.
The commercial solar sector achieved a remarkable feat by surpassing an annual record that had remained unbroken since 2017, with 1,851MWdc installed, marking a 19% increase from 2022. In the fourth quarter of 2023, commercial solar experienced a substantial 71% growth compared to the previous quarter, primarily fueled by a surge in NEM 2.0 installations in California. California accounted for 35% of the total national installed capacity in 2023, witnessing a 34% year-on-year growth in installations. Apart from California, states like New Jersey, New York, Illinois, and Massachusetts played significant roles in propelling the growth of commercial solar. Emerging markets such as Georgia and Texas also attracted numerous developers interested in constructing commercial solar projects due to their low development costs, minimal building saturation, and abundant land resources.
Furthermore, the ongoing alleviation of supply chain limitations and reduced system expenses bolstered the advancement of this industry during the entirety of 2023.
In the United States, the utility-scale sector installed 22.5GWdc in 2023, demonstrating a substantial 77% annual expansion and nearly 10GWdc more than the installations in 2022. During the fourth quarter of 2023, over 10GWdc of utility-scale projects were completed. This surge in installations mirrored the market repercussions of supply chain limitations in 2022, with many projects finalized in 2023 being delayed extensions of the 2022 project pipelines.
In contrast to residential, commercial, and utility-scale solar installations, the community solar sector experienced a modest 3% year-on-year growth, reaching 1,148MWdc in the previous year. 2023 represented the third consecutive year in which the national annual capacity surpassed 1GWdc.
Maryland and New Jersey showcased remarkable capacity growth, with both states experiencing a 169% and 608% year-on-year increase, respectively. While New York saw a slight decrease in installations in 2023 compared to 2022, the state still contributed 45% of the total national installations for the year.
Nevertheless, challenges persisted in certain well-established markets. For instance, in Massachusetts, installed capacity decreased by 2% from 2022 as developers encountered delays in siting, permitting, and interconnection reforms.
Installations in 2024
SEIA and Wood Mackenzie anticipate a collective increase of approximately 5GWdc in installations across all segments in 2024 compared to 2023, totaling nearly 38GWdc. Commercial, community, and utility-scale segments are projected to grow by 19%, 15%, and 26% respectively in 2024, driven by the pipelines of projects in advanced stages and under construction within each segment.
Nonetheless, residential solar is projected to decrease by 13% this year. SEIA and Wood Mackenzie have indicated that California’s transition to net billing will lead to reduced installation volumes in 2024. Moreover, the adverse effects of higher interest rates are anticipated to persist this year, dampening both sales and installations in other states.
