U.S. solar panel installations plummeted in 2022 as lingering supply chain issues hindered the industry, although forecasters anticipate a bounceback and significant growth over the next decade, according to a joint report from the industry trade group Solar Energy Industries Association (SEIA) and research analytics firm Woods Mackenzie released Thursday.
The primary cause of the decline was a significant disruption in the solar panel supply chain caused by detentions of Chinese solar panel materials by U.S. Customs and Border Patrol, over concerns that the products were developed by the forced labor of Uighur muslims, according to the report. While 2022 was a “tough year” for solar, supply chain issues are expected to be resolved in 2023, leading to a 41% surge in installations, Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report, said in a press release Thursday.
“Companies are aggressively shifting their supply chains, helping to ensure that solar installed in the U.S. is ethically sourced and has no connection to forced labor,” SEIA president and CEO Abigail Ross Hopper said in the press release. “While the solar and storage industry acts swiftly on supply chains and building a stronger domestic manufacturing base, ongoing threats of steep tariffs are holding back the potential of the historic Inflation Reduction Act”
Despite the overall decline in capacity, the residential market increased installation capacity by 40% in 2022, bringing the total proportion of U.S. homes with solar to 6%, according to the report. A record-breaking 700,000 homeowners installed solar panels in 2022, and the proportion is expected to reach 15% by 2030.
Utility-scale solar, on the other hand, plunged by 32% from 2021 to 2022, according to the report. The sector grew by just 11.8 gigawatts (GW) in 2022, with 4.3 GW coming in the fourth quarter as supply chain issues relaxed.
President Joe Biden’s signature climate and green energy law, the Inflation Reduction Act (IRA), helped support this fourth quarter rebound, according to the report. Worldwide, production capacity of both coal and renewables surged in 2022, as other energy sectors moved to pick up the slack from a shortage of natural gas following Russia’s invasion of Ukraine.
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