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Wood Mackenzie warned that political uncertainty could significantly alter its solar industry growth projections. After years of record installation totals and double-digit growth, U.S. solar industry growth is expected to be relatively flat over the next decade, said Sylbia Leyva Martinez, principal analyst at Wood Mackenzie, at the companys annual solar and energy storage summit. Wood Mackenzie said that in 2024, U.S. solar added about 50 GW, a record for the nation and possibly a peak year. The analyst group projects the U.S. will now add between 40 GW and 50 GW of average annual installations, declining annually through 2028 before resuming modest growth through the end of the decade and the mid-2030s. This represents nearly tripling the total cumulative solar capacity installed in the United States through the end of 2024, which, according to the Solar Energy Industries Association, reached 236 GW. However, Wood Mackenzie cautioned that political outcomes significantly change this forecast. Our forecasts show a 24% upside potential in the high case scenario and a 25% downside potential in the low case scenario compared to our base case, Leyva Martínez said. The future of the Inflation Reduction Act (IRA) and other policy measures will play a key role in the realization of projects, and many things can change during this uncertain political environment. Leyva Martínez highlighted the main uncertainties that explain the wide dispersion of the expected results, including: Meeting the exponential growth in cargo expected in the coming years Possible gas turbine shortage before 2029 Political uncertainty, particularly regarding tariffs The future of tax credits and other IRA provisions Much of the projected exponential growth in electricity demand is driven by AI data centers, with electrification also playing a role, Wood Mackenzie said. The Trump administration will have to balance its AI and data center ambitions with the energy reality, Leyva Martínez concluded. These mixed market and political dynamics are driving uncertainty in solar project development, and the industry will have to navigate these challenges carefully. Persistent challenges related to grid interconnection delays and labor availability may also limit future development, Wood Mackenzie said. Manufacturing Leyva Martínez highlighted the rapid growth of solar manufacturing capacity in the United States. According to his forecasts, module manufacturing capacity will increase from 17 GW in 2023 to 144 GW in 2027, with additional growth in wafer and cell manufacturing capacity. Weve seen exponential growth in domestic manufacturing over the past three years, said Leyva Martínez. However, challenging trade policies may jeopardize new investments in the sector. Solar manufacturing also made great 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. |
