IEA-PVPS report shows record year for US solar in 2023

The IEA-PVPS has released a report analyzing the development of the 2023 power systems market in the United States, defined as all nationally installed terrestrial PV applications with a capacity above 40 W.

It said records across the US solar industry were broken last year, as market disruptions from international trade issues decreased and policy and financial certainty increased in line with the implementation of the US Inflation Reduction Act (IRA).

A total 26.3 GW of new solar capacity was deployed last year, including 18.4 GW of utility-scale projects and 7.9 GW of decentralized systems. By the end of 2023, there were more than 4.7 million decentralized PV systems interconnected across the country.

Community solar projects, which refers to local solar facilities shared by multiple players who receive electricity bill credits for their share of the electricity produced, contributed 1.04 GW to the new deployment total. The report said this technology is quickly growing in popularity in the US market.

The key demand drivers for PV development in the United States include energy storage, which exceeded 7.2 GW of annual installations in 2023, and electric vehicle demand, which rose by nearly 1.5 million vehicles last year. Additional drivers include rising retail electricity costs, consumer demand for greater resilience, and the installation of solar in new residential constructions. The report said that record growth occurred despite challenges such as lengthy interconnection timelines, increasing curtailment, local opposition, and rising prices.

The IRA is referred to as "the most significant change in direct support policies for solar energy in US history,"? said the IEA-PVPS. The federal law introduced extensive tax credits and incentives for small- and large-scale solar installation and manufacturing. In 2023, several of the provisions under the IRA were clarified and implemented.

The report said that after the passage of the IRA, domestic deployment projections "rose significantly and there were announcements of manufacturing facilities up and down the supply chain." As of May 2024, there had been over 300 GW (DC) of manufacturing capacity announced across the solar supply chain, the IEA-PVPS said, including polysilicon, wafer, cells, ingot, tracking, production tools, inverters and other module components across new facilities or expansions.

"Many project owners and analysts have credited the expanded and new IRA tax credits as the driving force behind this growth," it said.? It predicted that the IRA will “drive even more rapid deployment in the years ahead.”?

The report said PV module prices and system costs have continued to decline, boosting the competitiveness of solar electricity. It cited an average residential PV system price of $2.49/W in 2023, while large centralized systems dropped to as low as $1.16/W. The typical price for a standard crystalline silicon module was $0.39/W.

In 2023, module imports nearly doubled compared to 2022 levels. IEA-PVPS reported that 162 installers and developers noted eased supply chain constraints, with record growth driven partly by the deployment of delayed projects. Despite increases in domestic manufacturing capacity, most PV modules used in the United States were still imported.

In its closing remarks, the report said “international trade issues continue to loom as the nascent manufacturing market seeks to protect itself, and it remains to be seen what sectors of the supply chain and business models will find success on US shores.”

The report is part of IEA-PVPS Task 1, which focuses on the technical, economic, and social aspects of PV power systems.