The world is shifting towards renewable energy. New data shows that solar power is set to become the predominant source of generating capacity behind the US power grid, within the next 25 years.
The driving factors behind solar power’s flare are efficiency, scalability, and declining cost. Coupled with technological innovation and policy support as the world aims to reach carbon neutrality, solar could just become the cornerstone of how we generate and consume electricity.
Solar for sustainable growth
The quarterly ‘SEIA/Wood Mackenzie Power & Renewables U.S. Solar Market Insight’ report shows that nearly half (48%) of new capacity added to the US grid during 2023 was solar-powered.
Further, the research team at Wood Mackenzie says the US solar industry could grow by an additional 55%. It should also be noted that the solar industry experienced a “rough 2022, with less installations and diversification across US suppliers.
Solar’s bright future ahead
While 2050 still seems a ways off, the immediate future shows promising growth as well. What about the next five years? The report notes that “growth is much stronger in the near-term before falling to the low single-digits starting in 2026.
The US power grid outlook shows an average yearly growth of 14%, particularly between 2023 and 2028. This is because solar is “still the core technology of the US energy transition,” Wood Mackenzie says.
While the predicted growth spurt looks promising, the challenges in this industry remain “very real”, with the researcher saying it would require “continued innovation” to tap into the US grid’s full potential.
Overcoming challenges
Some of the challenges to overcome include challenging market conditions, escalating interest rates, and fluctuation in installation trends. And as the 2022 data shows, installation trends can be fickle.
Due to policy-driven supply constraints, the industry saw a massive drop in installations during the 2022 period – a 16% decrease from 2021. In addition, utility-scale installations decreased by 31%. This slump was the lowest record since before the COVID-19 pandemic.
Installers are finding innovative ways to cope with the sales slowdown. Most notably, by focusing more on operational efficiencies, and experimenting with pricing and product tweaks.
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Solar could modernize the US grid
Michelle Davis, head of solar research at Wood Mackenzie and lead author of the report, says technological innovation is “critical,” along with “interconnection reform, regulatory modernization, and increasing storage attachment rates.”
One way of increasing storage could be to focus on integrating more energy storage solutions. Think batteries with storage power installations. In other words, apart from generating solar power, the storage solutions could capture excess energy during peak sunlight hours.
When solar generation takes a dip during the night or on cloudy days, the stored energy could be used instead. Not only would this modernize the grid, but it could also support the global push for carbon neutrality.
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About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
