Wednesday, 13 September 2023 15:57

Solar Capacity Continues to Expand at Impressive Pace

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Most of the attention and chatter in the energy sector have been focused on issues like the price of oil, a potential renaissance for nuclear energy, and whether electric vehicles (EV) will displace gas-powered vehicles. 

However, the proliferation of solar energy is less discussed but in many ways, it could be more impactful in the long-term. According to the Solar Energy Industries Association, there were an additional 12 gigawatts of installations in the first-half of 2023. This is a 20% increase from last year’s first-half.

A major factor is the Inflation Reduction Act (IRA) which boosted subsidies for home and corporate solar projects. It’s also boosting the domestic production of solar panels. In 2022, there was production of 10.6 gigawatts of domestic capacity, but this is projected to increase to 108.5 gigawatts by 2026. It’s also notable that capital expenditures in the solar industry were bigger than that of oil & gas last year. 

According to the industry group, the solar industry in the US is projected to grow 15% annually. It sees the full-scale benefits of the IRA to start hitting the industry by late 2024. In terms of challenges, it identifies interconnection of grids and cost-prohibitive batteries as bottlenecks for future growth. 

Finsum: A trend in the energy sector is the boom in solar due to lower costs and the Inflation Reduction Act. In particular, domestic manufacturing is a major beneficiary.. 


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