The United States had a record-breaking year for solar installations in 2024, adding 50 GW of capacity, said a report from Wood Mackenzie.

Installations grew 21% year-over-year and set a second consecutive record year. Solar accounted for 66% of all electricity-generating capacity in 2024, said the report.

However, Wood Mackenzie warned that year-over-year growth may discontinue for the United States through 2035. In its base-case outlook, cumulative solar installations are forecast to reach 730 GW through the next decade compared to 236 GW installed as of the end of 2024.

The report said persistent challenges related to grid interconnection delays and labor availability will constrain future development. The firm forecasts a 1% annual contraction over the next 10 years.

Image: Wood Mackenzie

In a high-case forecast, Wood Mackenzie increases its outlook by 24%. Under this scenario, it envisions tax credits and adders in the Inflation Reduction Act (IRA) remain unchanged, and any remaining policy guidance is released quickly and in a generally favorable manner.

The “high-growth” scenario also assumes that tax equity availability increases faster than expected and that interest rates decline more rapidly than forecast, reaching 3% or lower by the end of 2027. Furthermore, the “high-growth” scenario assumes that solar supply chains remain strong and that interconnection timelines are streamlined.

2024

Wood Mackenzie said that 2023 was a year of recovery for the solar industry, while 2024 was “the year of materialization of the IRA.” Solar installations more than doubled in 2024 compared to 2022 as supply chains rebounded and utility and corporate interest in solar rose considerably.

Texas once again led the way for solar installations, adding 11.6 GW. It was followed by California (5 GW) and Florida (4.7 GW). Installations declined in California year-over-year, while Florida installations grew 46%.

However, not all segments experienced growth in 2024. The residential segment installed 4.7 GW, a 32% decline from 2023. The contraction contributed to many bankruptcies in the industry, including large installers SunPower and Titan Solar Power.

Commercial solar installations grew 8% year-over-year, reaching 2.1 GW installed. 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, increasing 66% year-over-year as interconnection conditions improved.

Manufacturing

Solar manufacturing also took large 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 largely concentrated in the South, with 8.6 GW of annual production added in Texas and 8.4 GW in Georgia.

Solar cell manufacturing was reshored for the first time in five years as Suniva resumed production at its 1 GW facility in Georgia. Cell manufacturing is a more costly endeavor than its downstream counterpart in module assembly and remains a critical and underserved leg of the U.S. domestic energy supply chain.

Further upstream in the solar supply chain is silicon wafer manufacturing, which supplies solar cell fabs. Wood Mackenzie said no businesses brought wafer manufacturing online in 2024, and several canceled or downsized their planned factories.

“In late 2024, the U.S. government began to implement measures that could help domestic wafer manufacturing become 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 released domestic content guidance safe harbor table,” said the report.

The report said Qcells is expected to begin operation of its wafer manufacturing facility in 2025.

Solar wafers are made from raw polysilicon that is refined into ingots and then sliced into thin wafers. Wood Mackenzie said the buildout of U.S. polysilicon “hit a snag” in 2024 as REC Silicon shut 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 US-made solar-grade polysilicon, REC Silicon has shifted its production focus to silicon gases,” said Wood Mackenzie

The cost stack for solar installations can be seen in the chart below. Wood Mackenzie said residential pricing rose 2% in 2024, while commercial system pricing fell 7%, and utility-scale system pricing fell 4% for fixed-tilt and single-axis tracker systems.

Image: Wood Mackenzie