US solar industry trends in 2023


From pv magazine USA

The past year has represented a turning point for the US solar industry. The beginning of the year was marked by lingering pandemic-related delays, trade law enforcement, supply chain issues, and price hikes for components and shipping. Many of these headwinds led to delays and cancellations, and project deployments fell short of initial projections.  

The second half of the year was characterized by renewed optimism, as the landmark US Inflation Reduction Act of 2022 was passed, allocating a record $369 billion in spending for climate and energy measures. Abigail Ross Hopper, the president and CEO of the Solar Energy Industries Association, has dubbed the next 10 years as the “Solar + decade,” as solar and energy storage buildout is expected to continue to build momentum, now energized by the spending package. What can be expected for 2023? 

As is often the case with new technology policy and adoption, the country will look to California as a case study for where things may head for the solar industry. Specifically, Net Energy Metering (NEM), which is instrumental to the value of residential rooftop solar, will be a policy to watch again this year. Just before the clocks changed to 2023, the California Public Utilities Commission (CPUC) unanimously approved NEM 3.0, altering the mechanism by which residential rooftop solar customers are paid for sending their excess generation to the grid.  

Under the new NEM 3.0, Californians who install their projects after April 15 will be paid 75% less on average for their exported solar production, compared to the previous regime. This damaging effect on customer value has led ROTH Capital Partners to project a 30% year-over-year decrease from 2022 residential solar installations in the state. 

The nation will watch California’s residential solar industry closely to see how it will adapt to the loss in system value. A spike of installations can be expected before April as Californians rush to secure the NEM 2.0 credit value for the next 20 years. After that, the industry could suffer a precipitous drop off in installation requests, as happened in Nevada in 2017, when it made a similar cut to net metering. 

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California will act as a proving ground to show whether the CPUC was correct in its judgment that solar-plus-battery systems will rise in adoption as NEM is cut. Recent analysis has shown that an increase in adoption is highly unlikely, as the value for end users has been damaged by the new structure. Last year, NEM policy changes occurred or were blocked in FloridaGeorgia, Idaho, Michigan, Vermont and many other US states, and 2023 will likely be another battleground year for this policy. 

The Inflation Reduction Act set aside a record $369 billion to support climate and energy goals. The implementation of the package will take time as the industry sorts out the finer details on how to meet certain requirements in the act to qualify for significant tax credit incentives and value adders. 

The government of US President Joe Biden continues to work with industry stakeholders to understand how to implement the law. The White House recently released a guidebook to help industry members to navigate the complexities of its many offerings. 

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