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U.S. solar had a massive 2023

Data: SEIA/Wood Mackenzie; Chart: Axios Visuals
Data: SEIA/Wood Mackenzie; Chart: Axios Visuals

Solar energy companies installed a record 32.4 GW of new generating capacity in the U.S. last year, leaping 51% year over year.

Why it matters: Federal incentives and falling prices in certain segments sparked a huge turnabout for a sector that saw growth fall off a cliff in 2022.

State of play: Solar accounted for 53% of all new electric capacity added to U.S. grids in 2023 — the first time in 80 years that any renewable energy source made up the majority of new energy installations.

  • Solar now generates about 5% of U.S. electricity, up from 0.1% in 2010.

Flashback: A U.S. Customs crackdown on imported solar panels made with forced labor choked off the supply of modules in 2022, especially for large installers that tended to rely on the biggest manufacturers in China.

The latest: New domestic factories and alternative shipping routes unlocked module supplies for U.S. installers.

  • Large "utility-scale" projects boomed 77% compared with 2022, driven by a surge in Q4 as companies raced to complete projects before year-end, per research firm Wood Mackenzie, which compiled the market report for the Solar Energy Industries Association.

The growth occurred even as costs continued to rise for utility-scale projects, driven in part by higher interest rates.

  • Prices ticked up 7.2%, exceeding the 6.6% increase from 2022 to 2023.

Prices by contrast fell for residential and commercial installers, which order panels in smaller volumes and therefore can buy from a wider variety of manufacturers.

  • Their solar costs abruptly dropped 25-35% in Q4 alone, helping bring down the average cost of a home solar array to $25,000 from $40,000.

👀 What we're watching: U.S. Customs last month sent an extensive questionnaire to solar companies, indicating that the agency is expanding its scrutiny of imports — potentially crimping supplies once again.

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