The growth trajectory of the US solar industry is incredibly strong.
That’s what Michelle Davis, head of Global Solar at Wood Mackenzie, stated in an opinion piece recently published on the company’s website, adding that, “within a few years, the industry will install regularly between 40 and 50 gigawatts of capacity according to our latest perspectives”.
“That’s quite a feat when you consider that the most the industry has installed to date was 25 GW in 2021,” Davis said in the piece.
“Over the next decade, average annual growth will be 11 percent and the installed base of projects will increase nearly fivefold, from 150 GW installed today to nearly 700 GW installed in 2033” , Davis added.
That growth represents an enormous amount of capital investment, the Wood Mackenzie representative noted in the piece.
“Today’s solar market represents about $45 billion annually in capital expenditures on solar projects,” Davis noted in the Wood Mackenzie opinion piece.
“By 2033, that number will nearly double to $72 billion annually,” Davis added.
In the piece, Davis noted that as the U.S. solar industry grows, it will evolve to make up the majority of the nation’s generation capacity.
“According to our analysis, utility-scale solar will account for 40 percent of generating capacity in the US by 2050, and that doesn’t even include any distributed electricity loads serving the solar behind the counter,” Davis said in the piece.
Solar coasters
Davis also noted in the article that high levels of growth present challenges.
“The solar industry has been through its fair share of challenges, hence the ‘solar mountain,’ but these will not diminish as the industry grows,” Davis said.
“The most urgent challenge today is to interconnect a project with the transmission system. The time it takes for a project to interconnect to the grid from the date it enters the interconnect queue has been extended to four years,” Davis added.
“For comparison, that was about two years a decade ago. Transmission capacity has been limited as more projects have been built and very few new transmission lines have been built in the last decade,” he said. continue Davis.
The Wood Mackenzie representative also highlighted in the piece that there are political challenges.
“Distributed solar projects often face challenges to net energy metering (ie, offsetting the retail rate for solar output) as market penetration increases,” Davis said.
“Most states with a lot of distributed solar (think Hawaii, California, Arizona and Nevada) have moved away from net energy metering, changing how distributed solar is compensated,” he added Davis.
opportunities
Davis went on to note in the piece that the challenges present new investment opportunities in solar and storage.
“Given these challenges, there are numerous investment opportunities in tomorrow’s solar projects, which look different than they do today,” Davis said in the article.
“The best opportunity, and perhaps the most obvious, is to pair solar projects with storage much more frequently than is done today. This will help limit low-value midday solar exports, which are already wreaking havoc on highly penetrated grids and increasing restraint (aka waste),” Davis added.
“There are many other areas of opportunity as well: grid investors, greater penetration of home and building energy management systems, cost-effective meters that enable participation in the wholesale market — the list goes on,” Davis continued. .
US solar capacity
According to BP’s latest Statistical Review of World Energy, published in 2022, US installed PV capacity reached 93.7 GW in 2021.
This marked a 27.3% year-on-year growth rate from the 73.8 GW figure seen in 2020, the review noted. US installed PV capacity was 59.1 GW in 2019, 49.8 GW in 2018, 41.4 GW in 2017, 33.0 GW in 2016, 21.7 GW in 2015, 16.0 GW in 2014, 12.1 GW and 12.1 GW in 2014 2 GW in 2011, the review showed.
The country with the highest installed PV power figure in 2021 was China with 306.4 GW, according to the review, which revealed that the United States ranked second overall that year and that Japan take third place in 2021 with 74.2 GW.
China topped Germany’s solar capacity in 2015, producing 43.5 GW at the time, the report showed. Since then, it has held the top spot, according to the review.
Total global solar capacity in 2021 was 843.1 GW, according to the review. This marked a year-on-year growth of 19 percent and a year-on-year growth of 27.9 percent from 2011 to 2021, the review noted.
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