Solar installations in the United States grew 47% year-over-year (YoY) to 6.1 GW during the first quarter (Q1) of 2023, recording the best initial quarter for the country’s solar sector in terms of new installations.

According to U.S. Solar Market Insight Q2 2023, released jointly by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the growth in installations was significantly driven by a higher demand created through the Inflation Reduction Act (IRA) and increased utility-scale solar installations.

However, installations fell 19% from Q4, 2022.

The utility-scale solar market recovered from slower installations in Q1 2022 and achieved record installations of 3.8 GW during Q1 2023, up 66% YoY.

The solar sector alone accounted for 54% of all new power-generating capacity added to the country’s grid during the quarter.

Module Imports Ease

Owing to more clarity on IRA’s new credits that can be used in conjunction with the Solar Investment Tax Credit (ITC), more module importers were able to meet the documentation needs under the Uyghur Forced Labor Prevention Act, which eased the solar equipment supply chain.

SEIA President and CEO Abigail Ross Hopper said, “As IRA begins to flex its muscle and drive demand, the U.S. solar and storage industry is eagerly awaiting further guidance on some of the most impactful pieces of the law. Timely, specific, and workable implementation guidance from the administration will have a major impact on our success in both the near and long term.”

Delayed projects which awaited raw materials and equipment were able to transport the equipment to the project sites for the works to pick up the pace.

Florida stood out as the top-ranked solar market during Q1 2023 with 1.6 GW of new solar capacity additions. It installed 72% more solar capacity than California, which installed 951 MW, grabbing the second position.

Florida was also ranked first for utility-scale solar installations totaling 1.46 GW during Q1.

Residential and commercial solar

The residential segment added 1.6 GW of new solar capacity in Q1 2023, a 30% increase from the same period last year.

Wood Mackenzie projects that third-party-owned systems will begin to qualify for the ITC adders, and the overall segment will benefit from the IRA at this time, resulting in 12% growth for all states other than California.

Owing to easing supply chain constraints, the commercial segment installed 391 MW of new solar capacity in Q1, up 27% YoY. The report further projects a 13% growth in the commercial solar market in the U.S. in 2024.

Driven by the ITC tax credit under the IRA, the national commercial solar growth is expected to reach 11% in 2027 and 14% in 2028 as growth picks up in emerging markets.

Community solar

Community solar installations declined 13% YoY in Q1 2023, resulting in the lowest quarter of new capacity additions since Q1 2021.