The enactment of the Inflation Reduction Act (IRA) in 2023 has sparked an unprecedented boom in the U.S. solar industry, resulting in a historic addition of 32.4 gigawatts (GW) of new electric generating capacity. According to the U.S. Solar Market Insight 2023 Year in Review, jointly released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie earlier this month, this surge represents a remarkable 37% growth rate compared to the previous record set in 2021 and a staggering 51% increase from 2022.
The commercial solar sector shattered an annual record that had endured since 2017, with 1,851 MWdc installed, marking a 19% increase over 2022. Notably, fourth-quarter volumes in California doubled from their typical range as the commercial sector experienced a surge in installations driven by the transition to net billing.
A significant milestone in the renewable electricity sector, solar energy has accounted for over 50% of annual capacity additions to the grid in 2023, a feat not witnessed in 80 years. Projections suggest that total U.S. solar capacity will reach 673 GW by 2034, sufficient to power upwards of 100 million homes. Across all segments of the solar market, year-over-year growth was observed, with the utility-scale sector adding 22.5 GW of new capacity, and nearly 800,000 Americans installing solar panels on their homes.
Solar storage made considerable strides, representing 13% of residential installations and 5% of non-residential installations in 2023. Forecasts indicate an upward trajectory, with an expected incorporation of storage in 25% of new residential installations and 10% of non-residential installations by the end of 2024. SEIA projects growth-rate expectations for the commercial, community, and utility-scale segments at 19%, 15%, and 26%, respectively, for 2024.
Texas emerged as the frontrunner in solar installations, boasting 6.5 GW of new installations, surpassing California for the second time in three years. The surge in Texas was predominantly fueled by utility-scale installations, with nearly 4 GWdc added in Q4 2023 alone. Furthermore, Colorado and Ohio secured positions among the top 10 solar states in 2023, while Wisconsin made its debut on the list.
In a significant development, Microsoft unveiled plans in 2023 to transition several data centers to renewable energy sources through an agreement with ENGIE Energy Marketing. Leveraging existing renewable energy agreements, this partnership aims to propel Microsoft towards its ambitious goal of achieving 100% carbon-neutral energy every hour of the day by 2030.
Since the implementation of the IRA, a staggering $240 billion has been directed towards clean energy manufacturing and infrastructure projects. This substantial investment encompasses a diverse array of initiatives, including the development of nearly 300 new solar, wind, and battery energy storage projects, underscoring the nation’s commitment to renewable energy advancement.