The future looks sunny as the U.S. solar industry is expected to triple in just five years.
The first quarter of 2023 was the best ever for the solar industry in the U.S., with the installation of a whopping 6.1 GW of solar capacity. This means the power generated from the sun is expanding more than ever, providing a renewable and eco-friendly option for electricity.
One of the major reasons for this growth is the Inflation Reduction Act (IRA) of 2022. Think of the IRA as a boost for the solar industry, encouraging the creation of new solar projects and allowing existing projects to pick up the pace after delays caused by supply chain issues during the Covid-19 pandemic. It's like the sun coming out after a long storm, brightening the solar industry landscape.
In simple terms, experts predict that the solar market will grow three times larger over the next five years. That's enough solar energy to power millions of homes with clean, renewable energy.
The IRS and the U.S. Department of the Treasury have introduced a new aspect of the IRA called the "domestic content adder." Here's what that means for you as a homeowner: If a solar power project uses parts made in the U.S., it can receive up to 40% tax credit. That's a significant discount, making solar power more affordable for everyone. Plus, this encourages manufacturers to create solar power materials right here at home, boosting job growth and the economy.
Thanks to these incentives, many companies are announcing plans to create new manufacturing facilities in the U.S. This surge in domestic production means more availability of solar panels for your home, making it easier and cheaper for you to go solar. The amount of solar module production in the U.S. is expected to rise from 9 GW today to over 60 GW by 2026.
In addition to these benefits, the IRA includes plans for energy communities and low-income community projects. This means that everyone, regardless of their income, can have access to clean, renewable solar power.
Now, the picture isn't completely rosy. Going solar can seem complicated with all the different credits and rules, and it might take some time for a full range of U.S.-made solar materials to become available. Reach out to us here at Simple if you need any help breaking down the credits, rules, and regulations for your area. The overall trajectory is upwards and towards a brighter future.
For instance, the residential market grew by 30% compared to last year. This is great news as it indicates more and more homeowners are choosing to go solar. Over the next five years, it is expected that we'll add 36 GW of solar capacity in homes alone, growing at an annual rate of 6%.
For large-scale projects, the story is similar. They've bounced back from a difficult 2022, installing a record 3.8 GW of capacity. Plus, the commercial market (think businesses and corporations) also set a record by installing 391 MW and is predicted to grow by 12% this year.
In the first quarter of 2023, the solar industry was responsible for more than half of all new electricity-generating capacity added to the grid. That's a big deal and shows just how much solar power is expanding.