Image source: Canva.com
The year 2025 has brought remarkable developments in the U.S. solar energy sector, with solar panel costs reaching unprecedented lows. Key findings from the Fall 2024 Quarterly Solar Industry Update, released by the National Renewable Energy Laboratory (NREL), shed light on the factors driving these changes and their implications for the American solar market.
U.S. Solar Deployment Trends
Record Growth in Photovoltaics (PV)
- The International Energy Agency (IEA) projects substantial growth for PV installations in 2025, building on the record-breaking deployment of 2023. Nearly all new electric generation capacity in the next two years will come from PV, batteries, and wind.
- In the first half of 2024, the U.S. installed 14.1 gigawatt-hours (GWh) of energy storage – the largest first half on record.
Hybrid Systems
- Approximately 45% of battery capacity and 26% of utility-scale PV capacity in 2023 were part of hybrid PV/battery energy storage projects, a trend expected to continue.
Thin-Film Technology
- Thin-film PV, which represented only 3% of global deployments from 2015 to 2023, accounted for 17% of U.S. PV deployments during the same period, demonstrating the country’s focus on this technology.
Policy and Manufacturing Boosts
Impact of the Inflation Reduction Act (IRA)
- The IRA has catalyzed significant investment in domestic solar manufacturing. More than 95 gigawatts (GW) of manufacturing capacity were added across the U.S. solar supply chain since its passage, including nearly 42 GW of new module capacity.
- Third-party ownership of residential PV systems surged in 2024 due to high interest rates and IRA incentives.
Domestic Manufacturing Expansion
- In the first half of 2024, U.S. PV module production reached 4.2 GW, a 75% year-over-year increase, split evenly between thin-film and crystalline silicon (c-Si) technology.
- The Internal Revenue Service clarified that domestic solar ingot and wafer producers are eligible for a 25% investment tax credit, further encouraging local manufacturing.
Pricing Dynamics
Decreasing Capital Expenditures (CAPEX)
- Despite minor fluctuations in global polysilicon prices, CAPEX for PV systems in the U.S. decreased in the first half of 2024.
- U.S. module prices averaged $0.31 per watt direct current (Wdc) in Q2 2024, down 6% quarter-over-quarter and 16% year-over-year.
Global and Domestic Price Trends
- While global module prices remained near record lows at $0.10/Wdc, U.S. prices reflect a 190% premium over the global average due to tariffs and supply chain factors.
- Imported PV cell prices averaged $0.12/Wdc in Q3 2024, with module imports reaching nearly 15.4 GWdc in Q3 alone.
Challenges and Opportunities
Tariff Impacts
On October 1, 2024, the Department of Commerce issued preliminary countervailing duties on c-Si panels and cells produced in certain Southeast Asian countries, with tariffs ranging from 0% to 300%. This decision has influenced import dynamics and pricing.
Grid Integration
Scaling solar energy requires substantial investment in grid infrastructure to manage intermittent supply and integrate hybrid systems effectively.
Looking Ahead
The 2024 Quarterly Solar Industry Update highlights a pivotal moment for the U.S. solar industry. With policy support, technological advancements, and expanding manufacturing capabilities, solar energy is becoming increasingly accessible and affordable. Addressing challenges such as grid infrastructure and end-of-life management will be crucial for ensuring a sustainable and equitable energy future in the United States.
