The U.S. solar power market will get a 40% boost from the Cut Inflation Act, according to a report released Thursday by the Solar Energy Industries Association and Wood Mackenzie.
The report estimated the legislation would result in an additional 62 gigawatts of solar installations over baseline projections, bringing total solar installations to 336 gigawatts by 2027, nearly triple the current 129 gigawatts.
“This report provides a first look at how the Cut Inflation Act will transform the U.S. energy economy, and forecasts show a wave of clean energy and manufacturing investments that will lift communities to nationwide,” SEIA President and CEO Abigail Ross Hopper said in a statement.
Wood Mackenzie senior analyst Michelle Davis said the Cut Inflation Act has given the solar industry the greatest long-term certainty it has ever had.
“Ten years of investment tax credits stand in stark contrast to the one-, two-, or five-year extensions the industry has seen over the past decade,” Davis said in a statement. “It’s no exaggeration to say that the IRA will usher in a new era for the US solar industry.”
Despite this robust outlook, the report said the solar power installation forecast for 2022 fell to 15.7 GW, the lowest since 2019.
Indeed, the Uyghur law on the prevention of forced labor came into force on June 21, according to the SEIA report. This has resulted in the detention of solar modules, compounding supply chain issues.
“With this incredible opportunity comes the responsibility to clearly address concerns about forced labor and ensure we have ethical supply chains around the world,” Hopper said in a statement.
The SEIA report found that demand for rooftop solar installations is “at historic highs in the face of power outages and rising electricity prices”. According to the report, solar accounted for 39% of all new power generation capacity additions in the first half of 2022.
First Solar, the nation’s largest solar panel maker, said in August it would invest up to $1 billion to build a new plant in the United States.
The US solar market now represents around 4.5% of the total electricity mix.
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