New U.S. Solar Records Reached During 2023

The great news is that Solar adoption in the U.S. surpassed 5 million installations in 2023. This is a welcome new high mark for solar. At the same time, it's still early days for solar adoption in the U.S.

Low Penetration Means Decades of Growth Is Ahead For Solar

There are around 111 million buildings in the United States, so 5 million solar deployments represents 4.5% of the buildings across America. Given the low penetration numbers for solar deployments, it's not surprising that when you visit most neighborhoods, there are many more structures without solar systems installed than there are with solar systems installed, demonstrating the great opportunity for solar in the years to come.

Record Solar Installations in 2023

A record was established for newly installed solar capacity in 2023, with 26.3 Gigawatt hours of capacity added during the year, besting the prior high, that was set in 2021.

What's Driving Solar Installations

Most of the newly installed solar capacity during 2023 was associated with utility scale projects, followed by residential installations and commercial installations.

To understand the source and opportunity for solar going forward, it's necessary to individually focus on different classes of properties and solar projects

• Residential Sector: added 6,800 MW in 2023. There are 100 million Single Family Homes in America, 5.2 million multifamily homes (40 million housing units)
  

• Commercial Sector: added 1,851 MW in 2023. There are 5.5 million commercial buildings. 350,000 industrial buildings and 240,000 military buildings in the US.
  

• Community Solar: added 1,148 MW in 2023
  

• Utility Scale: added 22,500 MW in 2023

Sources: SEIA, Construction-Physics

Going Forward

Here’s a concise summary of the trends in solar energy over the next five years:

1. Residential Solar: Approximately 1% of single-family homes are expected to install solar panels annually. As younger climate conscious homeowners purchase their first homes, and the cost of solar technology decreases, adoption will continue to grow.

2. Utility-Scale Projects: Large-scale solar projects will steadily expand. Falling solar module prices, increased electricity demand, and tax credits from the Inflation Reduction Act will drive this growth for the foreseeable future.

3. Community Solar: Community solar initiatives will also gain traction. These projects offer favorable economics for both developers and end-users. By sharing solar energy generation across a community, more people can benefit from clean power. Offering an especially potent solution for the 40 million people living in multifamily properties.

4. Commercial Sector: The commercial sector also presents opportunities for solar adoption. However, it is more sensitive to interest rates since business need to finance the capital-intensive solar projects and the alignment of incentives with complex property ownership structures.