As we enter the second half of 2024, the U.S. solar market is poised for another transformative year, building on the momentum established in 2023. The past year saw significant growth in decentralized solar photovoltaic (PV) systems, with record numbers of residential installations and the rapid adoption of behind-the-meter battery storage. However, 2024 has already brought challenges, including the bankruptcy of major residential players like Titan and SunPower, highlighting the volatility and competitive pressures in the market. Despite these setbacks, the stage is set for continued advancements. With innovations in energy management systems (EMS), stronger policy support, and the ongoing expansion of distributed solar, 2024 is expected to further accelerate the shift toward energy independence and resilience across the country.
The U.S. solar market saw continued momentum in 2023, reflecting the ongoing shift from centralized to decentralized solar photovoltaic (PV) systems. According to the latest data from the Department of Energy (DOE), the total installed PV capacity in the United States reached 177.0 GWdc by the end of December 2023, marking an addition of 32.4 GWdc for the year. This represents a 23% growth in the solar market in 2023, an acceleration compared to the 19% growth observed in 2022. Looking ahead, 2024 is expected to maintain this robust growth trajectory, potentially adding another 30 GWdc to the total installed capacity, driven by favorable policy and technological advancements.
In 2023, solar accounted for 53% of all new electricity-generating capacity added in the U.S., up from 50% in 2022. The decentralized segment of the market, particularly residential installations, continued to outpace other sectors. Residential solar installations hit 5.5 GWdc in 2023, surpassing the 4.8 GWdc added in 2022 and breaking previous records with over 800,000 new projects in a single year. This trend is anticipated to continue in 2024, with residential installations projected to reach 6.5 GWdc as more states adopt favorable policies and incentives.
Utility-scale solar added 22.4 GWdc (65%) of the total capacity in 2023, a slight increase from 16.4 GWdc (67%) in 2022. Meanwhile, distributed solar, which includes residential and commercial installations, contributed 9.7 GWdc (35%) in 2023, compared to 8.0 GWdc (33%) in 2022. This growth in decentralized solar highlights the increasing preference for distributed energy solutions. By the end of 2024, distributed solar's share could rise further, potentially contributing 38% of the total new solar capacity, reflecting a broader shift towards decentralized energy systems.
Residential solar adoption continued to soar in 2023, with a 35% increase in quarterly installations since Q1 2022, compared to a 30% increase observed in 2022. This growth underscores a clear trend towards decentralized energy systems, driven by both economic considerations and advancements in technology. By the end of 2023, 1 out of every 20 households in the top solar-producing states had installed solar systems, a notable increase from 2022, when 1 out of every 25 households had done so. As we move into 2024, this momentum is expected to build, with the potential for 1 out of every 18 households in the leading solar-producing states to have installed solar systems by the end of the year. Additionally, 20 states achieved the milestone of producing over 150 watts per capita from residential solar, up from 17 states in 2022. Predictions for 2024 suggest that even more states will surpass this threshold, further solidifying the role of decentralized solar in the U.S. energy landscape. The deployment of behind-the-meter battery storage systems in parallel with distributed solar became increasingly important in 2023. These batteries allow homeowners and businesses to store excess solar energy for use during peak demand times or power outages, enhancing energy independence and resilience. This shift is expected to accelerate in 2024, with behind-the-meter storage predicted to grow by 40% as battery costs decline and the technology becomes more accessible.
In 2023, EMS systems were estimated to be integrated into around 13% of new residential and 5% of new commercial solar installations, reflecting their growing importance. For 2024, EMS deployments in the residential segment are projected to see over 50% increase, which suggests that by the end of the year, EMS systems could be part of approximately 25% of new residential and 10% of new commercial solar projects, depending on market conditions and technological advancements. This growing adoption underscores the critical role EMS systems play in managing decentralized energy solutions, enhancing efficiency, and maximizing the benefits of solar PV and battery storage in residential settings.
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