US solar installations are set to see significant benefits from the Inflation Reduction Act in 2024, marking a pivotal year for the clean energy sector. According to a recent report, an additional five gigawatts (GW) of capacity will be added to the nation’s power grid as a direct result of the legislation.
The Inflation Reduction Act (IRA) has already begun to reshape the landscape of renewable energy investments. The Solar Energy Industries Association (SEIA) highlights the immediate impact of this historic legislation, emphasizing its role in accelerating the deployment of solar and other renewable energy sources across the country.
Further support comes from the White House, which projects that the combined efforts of the Inflation Reduction Act and the Bipartisan Infrastructure Law will not only boost clean energy deployment but also lead to reduced electricity rates nationwide.
Michelle Davis of Wood Mackenzie highlights how various factors, such as the ease of getting tax credits, the stability of supply chains, and how interest rates move, might either push the solar installation numbers up by 17% or pull them down by 24%.
There’s an expectation to surpass last year’s installations by adding an extra five gigawatts in 2024, indicating growth in solar projects for businesses, communities, and large utility companies.
Last year, the industry installed 32.4 gigawatts, a 51% jump from 2022, largely thanks to resolving supply chain issues that allowed many pending projects to finish. The sector had faced difficulties in 2022, including tariffs on imports from some Asian countries and concerns over the use of forced labor. These challenges have lessened, helping the industry to bounce back.
Texas led the way in adding solar capacity, especially with big utility-scale projects. California, on the other hand, was a hotspot for smaller residential and commercial setups.
People in California were quick to take advantage of favorable rules for measuring and billing solar energy before stricter regulations came into effect. Despite this enthusiasm, a drop in residential solar setups in California is anticipated in 2024 due to these new rules and the effect of higher interest rates.
The growth of US solar installations highlights how government policies, market trends, and technology advances all work together.
Challenges exist, but the widespread embrace of solar energy shows a strong commitment to renewable and clean energy. The government, through initiatives like the Inflation Reduction Act, plays a key role in supporting and driving innovation and growth in the solar sector.
