June 12, 2024

The United States set a new record for solar manufacturing growth last quarter, as the industry rapidly expands ahead of a looming deadline.

Seventy-five percent of all new electricity-generating capacity added to the U.S. grid last quarter came from solar manufacturing, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. A record 11 gigawatts of new solar panel manufacturing capacity came online during the first three months of 2024.

Its’s the largest quarterly growth of solar manufacturing in American history. It also brings the country’s total capacity to 200 gigawatts. For reference, the power of a single gigawatt matches the horsepower delivered by 2,000 Chevy Corvette Z06s or used by 100 million LED light bulbs.

“This quarter proves that new federal investments in clean energy are revitalizing American manufacturing and strengthening our nation’s energy economy,” SEIA CEO Abigail Ross Harper said in a statement, adding that “the solar and storage industry is uplifting communities in every state across this country.”

The U.S. has benefitted from federal and state policies aimed at increasing the country’s production of clean energy, such as President Joe Biden’s 2022 Inflation Reduction Act (IRA) and a freeze on imported panels believed to be made with forced labor in China. Solar module manufacturing capacity has increased each quarter since the IRA was passed in August 2022.

The report also revealed that the U.S. added more than 40 gigawatts of new solar capacity in 2023, above initial estimates. Wood Mackenzie expects the solar industry will add another 40 gigawatts in 2024.

Utility-scale solar saw record growth and deployment. Florida, Texas, and California led the way in new added capacity during the quarter. Other states, including Nevada and New Mexico, also showed significant growth.

Despite its growth, “the solar industry faces a number of challenges to its continued growth including availability of labor, high voltage equipment constraints, and continued trade policy uncertainty,” said Michelle Davis, the lead author of the report.

The residential solar segment recorded its worst quarter in two years, driven down by policy changes in California. The California Public Utilities Commission’s new net metering policy decreased compensation for excess energy by some 75%, leading to a drop in installations.

Meanwhile, a two-year U.S. tariff holiday on solar panels from Southeast Asia expires Thursday. Domestic solar developers have purchased about 35 gigawatts of imported panels from Malaysia, Thailand, Cambodia, and Vietnam, Reuters reports. That’s almost the entire capacity expected to be added in the U.S. this year.

Once the tariffs come back into effect, companies will have six months to put their imported supply to work. If they don’t, which is likely, they will have to pay some taxes.

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