Report: U.S. Solar Panel Manufacturing Capacity Grows Nearly 4× Under New Federal Incentives

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U.S. solar industry added 9.4 GW of new installation capacity in Q2 2024, but challenges persist that hinder the market’s full potential.

ANAHEIM, California and WASHINGTON, D.C. — Solar module manufacturing capacity in the United States now exceeds 31 gigawatts (GW) — a nearly four-fold increase since the Inflation Reduction Act (IRA) became law in 2022.

According to the U.S. Solar Market Insight Q3 2024 report released today by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, federal clean energy policies continue to drive manufacturing and deployment growth as the solar industry installed 9.4 GW of new electric generation capacity in Q2 2024.

In two years under the IRA, the solar industry has added 75 GW of new capacity to the grid, representing over 36% of all solar capacity built in U.S. history. Nearly 1.5 million American homes have installed solar since the IRA passed.

“The solar and storage industry is turning federal clean energy policies into action by rapidly creating jobs and powering economic growth in all 50 states, particularly in battleground states like Arizona, Nevada and Georgia,” said SEIA president and CEO Abigail Ross Hopper. “We are now manufacturing historic amounts of solar energy in America, and soon, we will have enough domestic module production to supply nearly all U.S. demand for years to come.”

Texas continues its run as a dominant solar market, leading the nation with 5.5 GW of solar capacity installed in the first half of 2024. States with closely watched elections this November, including Texas, Florida, Nevada, Ohio and Arizona, are among the top 10 solar states in 2024.

“The solar industry had a great second quarter, mostly due to growth in the utility-scale segment,” said Michelle Davis, head of global solar at Wood Mackenzie and lead author of the report. “But future solar growth is being hindered by broader power sector challenges — interconnection backlogs, electrical equipment shortages, and constraints on labor availability. The industry also faces uncertainty related to newly proposed tariffs and the presidential election. There is currently a lot to navigate in the solar industry.”

The residential solar market continued to contract in Q2 2024, driven by policy changes in California and high interest rates nationally. The sector added 1.1 GW of new capacity in Q2, its lowest quarter in nearly three years. However, the residential solar market is expected to see growth again in 2025 and is projected to set annual records from 2026-2029.

Annual solar installations will grow at 4% on average over the next several years as the industry contends with previously mentioned challenges. By 2029, total U.S. solar capacity is expected to double to 440 GW.

Solar Market Insight Report Introduction

In Q2 2024, the US solar market installed 9.4 GW_dc of capacity, a record second quarter for the industry. While installations declined 21% quarter-over-quarter, they increased 29% from a year earlier.
Solar accounted for 67% of all new electricity-generating capacity added to the US grid in the first half of 2024.
Domestic module manufacturing capacity increased by over 10 GW to 31.3 GW in Q2 2024 as more facilities continued to come online.
Texas was the leading state for solar installations in the first half of the year, with 5.5 GW_dc online — nearly twice as much capacity as Florida, the second-ranked state, which had 2.9 GW_dc.
The residential segment continued to decline, with 1.1 GW_dc installed in Q2, a decrease of 10% quarter-over-quarter and 37% year-over-year. California continued to drive this decline, shrinking 36% from the first quarter during the state’s transition to net billing. We expect residential solar installations to hit a floor this year, driving a 19% contraction in residential solar nationwide.
The commercial solar segment installed 427 MW_dcin Q2 2024, 5% less than Q1 2024 and 6% more than Q2 2023.
The community solar segment installed 270 MW_dc in Q2 2024, a decline of 12% both quarter-over-quarter and year-over-year. A handful of states saw quarter-over-quarter growth, but this was outweighed by declines in key markets like Maine, Massachusetts, and Illinois.
The utility-scale segment installed 7.6 GW_dc, a robust 59% increase year-over-year. While this reflects a 23% decline from Q1 2024, first quarter volumes were high due to projects finally coming online after various delays throughout 2023.
In this report, we have incorporated our estimated impacts of potential new antidumping and countervailing duties (AD/CVD) on imports of crystalline silicon cells and modules from four Southeast Asian countries. Preliminary determinations for these tariffs are anticipated this fall. While there is still considerable uncertainty around final details, we expect that tariff impacts on solar deployment will be modest. There is sufficient cell and module production capacity from multiple sources that isn’t subject to the proposed tariffs: production located outside of the target countries, expanding domestic production, and sources of thin film modules.
Our latest five-year outlooks show the US solar industry will consistently install at least 40 GW_dc per year from 2025 onward. This year, installations are expected to decline 4%, driven by a 2% decline in the utility-scale segment and a 19% decline in the residential segment. From 2025-2029, annual growth will average 4% for the entire industry. Utility-scale solar — the largest segment — continues to be limited by a lack of labor availability, high voltage equipment constraints, and interconnection delays.