4 Solar Industry Trends for 2024 and Beyond

Growth and Change Amidst Uncertainty and Inflation

Global commitment to sustainable energy is intensifying. Solar leads the charge on new energy development, bringing forth innovative technologies, policy shifts, and key market trends.

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Explore four trends that will define the solar market in 2024, including projected growth, global supply chains, inflationary impact on energy pricing, and the rise of community solar farms.

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#1: Continued Solar Growth Despite Uncertainty In 2023, the solar industry saw a remarkable 55% increase in new electric generating capacity thanks to the IRA and favorable policies. With total installed solar capacity now up to 161 GW, some estimates project that a 23% increase in solar capacity will bring total output to around 6.8% of all electricity in 2024.

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Despite ongoing positive market growth, a more modest 10% increase is projected for 2024. But while 2024 isn’t predicted to bring the meteoric growth seen last year, overall market trends remain positive.

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Anticipated challenges, including new state policies, a shortage of transformers, elevated interest rates, and high costs of financing are predicted to slow production, with growth to resume pace in 2025. Grid capacity constraints and an economic slowdown haven't dimmed future outcomes. The SEIA projects that U.S. solar capacity will reach 377 GW by 2028, powering over 65 million homes.

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#2: Inflation and Electricity Costs Rising prices of goods and services are projected to slow in 2024, but electricity costs remain higher than ever.  As gasoline prices continue to rise, the IEA announced that solar energy is now the cheapest form of electricity on the market. Non-renewable energy costs are likely to grow disproportionately compared to the price of solar.

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Partnering with organizations through Power Purchase Agreements, or PPAs, have become a highly desirable option that keep electricity bills even lower through predictable monthly payments.

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PPAs are established between renewable energy developers and property owners to offset grid electricity costs. Customers only pay for the solar energy produced at a rate typically lower than the current utility rates. 

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#3: The Rise of Community Solar Community solar has become a popular form of electricity consumption thanks to its ease of accessibility.  Unlike traditional solar panel installations that must be housed on open property or rooftop space, community solar is designed for large-scale usage among multiple tenants.

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Siting issues are one of the biggest limiting factors to solar access. The rise of community solar means more people will be able to take advantage of solar, often lowering bills by around 10%.

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Community solar is estimated to grow to 14 GW of capacity by 2028, or an annual average of 8% every year. Positive policy developments supporting the installation of more community solar farms are fueling growth.

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#4: Supply Chains and Pricing Changes. Escalating geopolitical conflict has impacted supply chains, and will continue to affect industries like solar as markets adapt to changes in real-time.

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The passage of the Uyghur Forced Labor Prevention Act in 2022 led to a 16% decrease in installation volumes in the United States.  China amounts to over 80% of global totals for polysilicon, water, cell, and module production capacity. Capacity outside of the country is currently unable to fulfill the demand for these resources, leading to the US bringing overseas production of PV materials stateside.

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It is estimated that annual module production capacity outside China will increase at least 78% to 270 GW by late 2024. This has led to a plummet in module pricing: prices of polysilicon have declined 70% even as demand has increased by 20%. 

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By the end of 2024, solar module prices may approach the threshold of $0.10/W – a number many thought would be impossible until 2030. Solar panels have become more affordable to produce and install in the United States

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2024 Outlook for Solar Energy is Optimistic While 2024 may not replicate the meteoric growth witnessed in the previous year, the solar industry remains on an upward trajectory, promising positive market trends and sustainable advancements.  The commitment to renewable energy sources is unwavering, with projections indicating a brighter, more accessible solar future. 

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