Renewables still make up a small portion of U.S. energy generation but the solar industry reports 2023 may turn out to be a year for major gains.
A report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie projects the U.S. solar energy industry will add a record 32 gigawatts (GW) of new capacity in 2023, a 52% increase from 2022.
As of February 2023, America had nearly 1.3 million megawatts of total electricity generation capacity.
The pandemic caused the industry to hit the brakes in 2020 when supply chain issues and restrictive trade policies slowed production. But the report cites improvement in supply chains and incentives in the Inflation Reduction Act (IRA) as the main drivers of the increase in power generation. The report projects solar power generation will grow from 153 GW today to 375 GW in five years.
“The United States is now a dominant player in the global clean energy economy, and states like Florida, Texas, Ohio, and Georgia are at the forefront of this job growth and economic prosperity,” said SEIA President and CEO Abigail Ross Hopper. “The solar and storage industry is delivering abundant clean energy that is generating tens of billions of dollars of private investment, and this is just the tip of the iceberg.”
SEIA says a surge of new U.S. manufacturing investments is also expected to improve supply conditions over the next few years. In fact, the industry group believes it is possible that by 2026, U.S. solar module manufacturing output could be ten times greater than it is today.
In addition to utilities building large solar farms, individual homeowners are taking advantage of tax credits to help pay for rooftop installations to help power a home. The financial advantages of these installations vary state-to-state.
Sunshine State sees the fastest growth
Florida continues to dominate the 2023 state solar rankings, installing 2.5 GW of new capacity in the first half of this year. This is 52% more than the next highest state of California, and already more solar capacity than Florida has ever installed in a single year.
A recent ConsumerAffairs study found the average home solar system costs $16,715 after the federal tax credit in 2023.
The study found the average cost for a residential solar power system is currently $2.50 to $5 per watt before incentives. It typically takes five to 15 years to break even on installation costs.
According to the study authors, the investment may be worth it if the loan payments for your solar panels are less than your existing electricity bill.