FILE PHOTO: Plants grow through an array of solar panels in Fort Lauderdale, Florida, U.S., May 6, 2022. REUTERS/Brian Snyder
By Laila Kearney
(Reuters) – New solar installations in the U.S. dropped 16% to 20.2 gigawatts (GW) in 2022 from the prior year, largely because a ban on some Chinese goods limited the availability of panels, according to a market report released on Thursday.
The quarterly report by the Solar Energy Industries Association and research firm Wood Mackenzie revised up previous estimates for the year and projected a broad market recovery ahead as the country’s solar industry was set to benefit from new climate legislation and supply chain onshoring.
“While 2022 was a tough year for the solar industry, we do expect some of the supply chain issues to ease, propelling 2023 growth to 41%,” said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report.
Utility-scale solar installations fell by about a third year-over year to 11.8 gigawatts, the lowest since before the COVID-19 pandemic, the report said. Still, last year’s general upward revision was a result of more utility-scale projects coming online in the last quarter of 2022 than expected.
The residential segment, meanwhile, rose by 40%, with a record 700,000 homeowners installing rooftop solar in 2022, the report said.
The report projects steady growth, averaging 19% a year, until 2027.
Helping to spur that upswing is a surge in solar panel production within the U.S., with output projected to nearly triple to 25 GW from the current level by the end of this year, the report said.
U.S. President Joe Biden’s Inflation Reduction Act, passed last year, has also helped stabilize the outlook for solar financing, the report said, by providing hefty subsidies to build renewable energy projects.
The greater availability of solar panels is expected to boost installations this year, after projects were slowed by U.S. restrictions on solar panels from China’s Xinjiang over concerns about forced labor.
Reuters reported this week that U.S. imports of Chinese solar panels are picking up after months of gridlock stemming from the forced labor protection law.