Solar Industry Growth Projections: What Does the Future Hold?

Written by Matthew Ludden / January 29, 2023 / 8 Minute Read
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Explore the rapid growth of the solar energy industry, driven by technological advancements and increasing demand. Discover why solar is becoming a mainstream power source and the challenges it faces in the United States.


Is Solar Energy a Growing Industry?

The solar energy industry is witnessing significant growth, driven by technological advancements, increasing consumer demand, and supportive government policies. The statistics on solar are clear that the solar energy market is poised for further growth.

Concentrated solar power may still be years away, but the solar energy market has averaged an annual growth rate of 24% over the last decade. Somewhere between rooftop solar on homes and businesses to complete solar power plants, the future of solar photovoltaic is still being defined.

As we embrace sustainable energy solutions, solar energy is not just an alternative; it’s becoming a mainstream power source. As an MIT publication states, “The massive scale of the solar resource and its broad distribution globally are consistent with solar energy becoming an important source, perhaps the leading source, of electricity generation worldwide.” Key players in the industry are scaling up, and the global capacity for solar energy is consistently increasing.

This growth is reflected in the rising market size, with solar energy adoption becoming more prevalent in various sectors worldwide.

Prior Growth 24%
The solar industry averaged an annual growth rate of 24% over the last decade
Projected Growth $373.84 bn
Solar power market is projected to reach $373.84 billion by 2029.

How Fast Is the Solar Industry Growing?

The growth of the solar industry is not just steady; it’s accelerating at an impressive pace. Recent statistics reveal a substantial increase in the adoption of solar energy, outpacing the growth rates of previous years.

Historical Trends

For decades, the solar energy market was a niche industry, but a confluence of technological advancements and an increasing global focus on renewable sources of energy has transformed the future of power generation.

2021 to 2029

The US set new records in 2023 and overall, the global solar power market is projected to grow from $234.86 billion in 2022 to $373.84 billion by 2029, at a CAGR of 6.9% in the forecast period, 2022-2029. This surge is largely fueled by the escalating demand for renewable energy sources, as individuals and businesses alike recognize the urgency of transitioning to sustainable power.

Obstacles to Growth

One threat to the rapid expansion within the United States is ongoing reliance on foreign markets for solar photovoltaic equipment. While US solar project developers have relied on lower-priced solar photovoltaics, a recent decision placed tariffs on many of the solar photovoltaics sourced in Southeast Asian countries.

So despite rising adoption, the pace at which the solar energy market grows will depend on several factors that are yet to be determined.

What Are the Projections for the Solar Industry?

When we look to the immediate future of the solar market, the horizon is bright with promise and potential.

Authoritative bodies like the Solar Energy Industries Association (SEIA) and Wood Mackenzie offer optimistic projections for the coming years.

SEIA states, “Solar PV and wind additions are forecast to more than double by 2028 compared with 2022, continuously breaking records over the forecast period to reach almost 710 GW.”

Michelle Davis, head of solar research at Wood MacKenzie states, “The U.S. solar industry is on a strong growth trajectory, with expectations of 55% growth this year and 10% growth in 2024.”

Over the next five years, the industry is poised to see remarkable advancements in solar PV technology, an increase in solar capacity, and a deeper integration into the global energy mix. However, this path is not without its challenges.

Issues such as supply chain constraints, regulatory hurdles, and the need for grid modernization present complex obstacles. Nevertheless, by 2035, solar energy has the potential to power 40% of all US electricity.

The opportunities for innovation, market development, and the role of solar in achieving a sustainable energy future are immense and continue to drive the industry forward.

Potential Growth 40%
By 2035, solar energy has the potential to power 40% of all US electricity.
Solar vs. Hydroelectricity 14%
solar power is projected to produce 14% more than hydroelectricity in 2024

What Is the Solar Industry Outlook for 2024?

As we look ahead to 2024, the solar energy market’s prospects are both promising and complex. The impact of the Inflation Reduction Act will significantly energize the industry with financial incentives and policy backing.

Impact of Inflation Reduction Act

This crucial legislation is set to not only stimulate the solar market but also mitigate some of the pressing supply chain challenges that have impeded growth in the past. In addition, solar power is projected to produce 14% more than hydroelectricity in 2024, highlighting its increasing prominence in the renewable energy sector.

Moreover, the U.S. Energy Information Administration forecasts a notable addition of 36 gigawatts (GWac) of new solar capacity to come online in 2024 alone. While this figure has been revised down from an initial estimate of 41 GWac, it still signifies that solar growth will continue beyond the record-setting 31 GWac achieved in 2023.

Consumer Demand

This expansion reflects a growing confidence in the government and the private sector in solar power’s viability. The challenge in 2024 and beyond is accelerating solar PV deployment and its role in shaping a sustainable energy future.

A significant amount of solar energy potential is still untapped, as there are over 111 GWdc of large-scale solar projects currently in various stages of construction or development.

Fueling this growth is the largest investment in U.S. solar history by Q-cells, which plans to establish 8.4 GWac of solar panel production capacity by 2024. There is a clear appetite in the US solar market and private companies for more domestically manufactured solar systems. Over the next 8 years, Microsoft plans to purchase 12 GWac of these American-made solar panels.

Coupled with ongoing advancements in solar technology, these developments are expected to continue driving market growth and enhancing the efficiency and accessibility of solar power systems.

Together, these factors make 2024 a crucial year for the solar industry, marking a time of robust growth and significant technological progress.

The Role of Government Policies in Solar Industry Growth

Government policies play a pivotal role in shaping the solar market. Incentives and tax credits have been instrumental to solar power system adoption dating back to the Public Utilities Regulatory Act of 1978 (PURPA).

The Inflation Reduction Act is proving to be a key driver in transforming solar adoption for homeowners and investment by private companies. This legislation extends the Investment Tax Credit and Production Tax Credit with new credits for systems bought online after January 1, 2025 (EPA).

These policies not only make solar solutions more financially accessible but also signal long-term commitment to the solar energy market, boosting investor confidence. This governmental support is crucial for the industry’s expansion, as it helps overcome economic barriers and accelerates the transition to sustainable energy sources.

Resources For Solar Energy and the US Government

US government websites related to the solar energy market:

These websites provide valuable information, resources, and updates regarding solar energy in the United States.

Technological Innovations in Solar Energy

The solar energy sector is witnessing a surge in technological innovations, particularly in solar PV systems.

These rapid advancements may lead to an acceleration in concentrated solar power and may help reduce the need for utility-scale solar installations.

A few of the most promising technologies include:

  • Bifacial solar panels: Capture sunlight from both sides and increase solar capacity. This increased efficiency may also reduce installation costs.
  • Solar storage: Electric Vehicles (EV) and other consumer industries have helped propel battery technology at an exponential rate. Advancements in battery technology are directly linked with achieving long-term capacity goals in solar.
  • Solar heating and cooling: The long-term certainty of solar and the future HVAC may be interconnected. Harnessing sunlight to provide hot water, space heating, cooling, and pool heating for residential, commercial, and industrial applications may reduce strains on other, more traditional forms of electricity.
  • Solar windows: As an alternative to traditional solar PV materials, solar windows are being researched and developed by the National Renewable Energy Laboratory (NREL). This glass transforms from transparent to tinted and can convert sunlight into energy.
  • Solar paint: While currently lacking commercial efficiency, solar paint could rise beyond the current 7-8% efficiency to become a cost-efficient method of capturing solar power on nearly any surface.

Significant efficiency improvements, reducing costs, and increasing the feasibility of solar solutions across diverse applications broaden market opportunities in the US and many countries. The mix of design innovations, new materials, and other industries adapting to solar technologies enhances the market opportunities for these renewable sources of electricity.

The Future Of Electricity

In conclusion, the future of the solar energy market is bright. The solar industry is experiencing unprecedented expansion over the last decade hitting new highs in 2023.

Once considered an alternative with considerable limitations, the market share for solar is being driven by increasing demand, supportive government policies, and advancements in solar technology.

To become a mainstream power source for electricity globally, technological innovations in solar PV systems, such as bifacial solar panels, solar storage, solar heating and cooling, solar windows, and solar paint must continue to reshape the industry.

For those interested in exploring further into the world of solar research and staying updated on the latest developments, numerous US government websites offer valuable information and resources.

As we move forward, the opportunities for innovation, market development, and the role of solar in achieving a sustainable energy future are immense. The solar industry is not only growing but also evolving to meet the energy challenges of the future. It’s a pivotal time for solar energy, and by staying informed and engaged, we can all contribute to its continued success.

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FAQ Section

The solar market size is projected to continue its rapid growth from 2021 to 2029 at a CAGR of 6.9% between 2021 to 2029. The total global market is projected to reach $373.84 billion by 2029.

Both global demand and adoption of solar PV face several challenges including grid integration and supply chain disruptions.

A few obstacles include:

  • Interconnection bottlenecks
  • Building Integrations
  • Energy storage
  • Cost increases from inflation and tariffs on foreign materials
  • Environmental impacts
  • Efficiency of systems

Addressing these issues and others will be crucial for maintaining the growth momentum and ensuring the reliability and scalability of solar energy solutions.

According to Ecowatch, the top 10 corporations using solar power in the US account for 14% of all installed solar capacity:

  1. Meta: 3,588 MW
  2. Amazon: 1,115 MW
  3. Apple: 987 MW
  4. Walmart: 689 MW
  5. Microsoft: 551 MW
  6. Target: 515 MW
  7. Cargill: 342 MW
  8. Kaiser Permanente: 303 MW
  9. Anheuser-Busch: 301 MW
  10.  Evraz North America: 300 MW