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The U.S. solar industry installed 9.4 gigawatts (GW) of new electric generation capacity in the second quarter of 2024, marking a significant achievement attributed to strong federal clean energy policies. This data comes from the U.S. Solar Market Insight Q3 2024 report, published by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
The recent surge builds on the momentum of the Inflation Reduction Act (IRA), signed into law by President Joe Biden in August 2022. The IRA, the largest climate and energy spending package in U.S. history, has propelled the solar industry to new heights. Since its enactment, the sector has added 75 GW of capacity to the grid, accounting for over 36% of all solar installations in U.S. history.
“The solar and storage industry is turning federal clean energy policies into action by rapidly creating jobs and powering economic growth in all 50 states, particularly in key battleground states like Arizona, Nevada, and Georgia,” said SEIA President and CEO Abigail Ross Hopper.
Uneven growth across sectors
Despite the overall record-setting quarter, growth varied significantly across different market segments. The residential solar sector saw a notable slowdown, installing just 1.1 GW, its lowest quarterly total in nearly three years. This decline was driven by high interest rates and policy changes in California, which led to layoffs and two major bankruptcies: Titan Solar and SunPower.
As a result, residential solar installations are expected to drop by 19% in 2024, with California’s market alone predicted to contract by 41% compared to 2023. However, industry analysts foresee a rebound in 2025, driven by increased third-party ownership, ITC bonus adders, and rising electricity rates.
The commercial solar sector showed a modest 6% year-over-year growth, adding 877 megawatts (MW) in Q2 2024. Growth was strong in states like California and Illinois, but overall 2024 expectations for this segment have been lowered by 3%. A challenging year is anticipated for 2025 due to California’s new net billing scheme, but long-term projections remain positive, with the sector expected to expand to nearly 3 GW by 2029.
Meanwhile, the community solar segment saw a 2% decline in the first half of 2024, reaching 577 MW. Legislative setbacks and interconnection delays have plagued this sector, turning what could have been a banner year into one of frustration. However, the federal $7 billion Solar for All program offers hope for future growth.
Utility-scale sector leads the way
The utility-scale sector had its strongest second quarter on record, installing 7.5 GW of new capacity—a 59% increase year-over-year. This growth was accompanied by 7.7 GW of new project contracts, although contracting activity was down by 23% compared to Q2 2023. Looking forward, the sector is projected to add over 186 GW of new capacity through 2029, despite challenges such as supply chain constraints and interconnection delays.
A promising outlook
Overall, the U.S. solar industry is on track to install more than 250 GW over the next five years, bringing total capacity to 440 GW by 2029. While ongoing policy support and industry adjustments are crucial, the solar sector is set to remain a cornerstone of the nation’s clean energy transition.
Report finds 43 states took solar policy action in Q1 this year
Source: SEIA
