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Solar power may have had a peak year in 2024, as persistent interconnection workforce challenges and more are projected to lead to annual declines of 1% through 2035, according to a Wood Mackenzie report. The United States had a record year for solar installations in 2024, adding 50 GW of capacity, according to a report by Wood Mackenzie. Installations grew 21% year-over-year, setting a second consecutive record. Solar energy is expected to account for 66% of all electricity generating capacity in 2024, according to the report. However, Wood Mackenzie warned that year-on-year growth in the United States could be halted until 2035. Under its base case, cumulative solar installations are projected to reach 730 GW over the next decade, up from 236 GW installed by the end of 2024. The report notes that persistent problems related to grid interconnection delays and labor availability will limit future development. The company forecasts a 1% annual contraction over the next 10 years. In an optimistic outlook, Wood Mackenzie raises its outlook by 24%. Under this scenario, it expects the Inflation Reduction Act (IRA) tax credits and supplements to remain unchanged , and any remaining policy guidance to be released quickly and generally favorable. The high growth scenario also assumes that fiscal capital availability increases more rapidly than expected and that interest rates decline more rapidly than expected, reaching 3% or less by the end of 2027. Furthermore, the high growth scenario assumes that solar energy supply chains remain strong and that interconnection timelines accelerate. 2024 According to Wood Mackenzie, 2023 was a year of recovery for the solar industry, while 2024 was the year of the IRA realization. Solar installations more than doubled in 2024 compared to 2022, as supply chains recovered and interest in solar energy from businesses and utilities increased significantly. Texas once again led the way in solar installations, adding 11.6 GW. It was followed by California (5 GW) and Florida (4.7 GW). Installations in California decreased year-over-year, while in Florida they grew by 46%. However, not all segments experienced growth in 2024. The residential segment installed 4.7 GW, down 32% from 2023. The contraction contributed to several bankruptcies in the sector, including major installers SunPower and Titan Solar Power. Commercial solar installations grew 8% year-over-year, reaching 2.1 GW. The segment was led by strong deployments in California, Illinois, New York, and Maine. Community solar installations also had a record year, adding 1.7 GW and increasing 35% over 2023 totals. Capacity in New York reached 861 MW, up 66% year-over-year thanks to improved interconnection conditions. Manufacturing Solar manufacturing also made great strides in 2024, with domestic solar module assembly growing 190%, from 14.5 GW at the end of 2023 to 42.1 GW by the end of 2024. Solar manufacturing facilities are heavily concentrated in the South, with 8.6 GW of annual production added in Texas and 8.4 GW in Georgia. Solar cell manufacturing was offshored for the first time in five years when Suniva resumed production at its 1 GW facility in Georgia. Cell manufacturing is more expensive than module assembly and remains a critical and neglected link in the U.S. domestic energy supply chain. Further up the solar supply chain is silicon wafer manufacturing, which supplies solar cell factories. According to Wood Mackenzie, no company started wafer manufacturing in 2024, and several have canceled or scaled back their planned factories. In late 2024, the U.S. government began implementing measures that could help make domestic wafer manufacturing more viable. This includes allowing solar wafer manufacturers to claim the 25% 48D CHIPS Act ITC in addition to the 45X PTC and incorporating wafers into the most recently published domestic content guidance safe harbor table, the report said. According to the report, Qcells is expected to launch its wafer manufacturing plant in 2025. Solar wafers are made from raw polysilicon, which is refined into ingots and then sliced ??into thin wafers. According to Wood Mackenzie, the expansion of U.S. polysilicon will hit a snag in 2024, when REC Silicon shuts down production at its Moses Lake, Washington, facility a year after opening due to issues with material purity levels. With a limited potential customer base for U.S.-made solar-grade polysilicon, REC Silicon has shifted its production focus to silicon gases, Wood Mackenzie said. The costs of solar installations can be seen in the following graph. According to Wood Mackenzie, residential prices increased by 2% in 2024, while those for commercial systems fell by 7%, and those for utility-scale systems fell by 4% for fixed-tilt and single-axis tracking systems. |
