New solar installations in the U.S. dropped 16% to 20.2 GW in 2022 from the prior year, largely because a ban on some Chinese goods limited the availability of panels, according to a market report released on Thursday.
The report by Wood Mackenzie and the Solar Energy Industries Association (SEIA) revised up previous year estimates and forecasts a broad market rebound ahead as the country's solar industry is expected to benefit from new climate legislation and supply chain onshoring.
"While 2022 was a tough year for the solar industry, we do expect some of the supply chain issues to ease, propelling 2023 growth to 41%," said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report.
According to the report, utility-scale solar installations declined by roughly a third year on year to 11.8 GW, the lowest level since before the COVID-19 pandemic. Yet, last year's general upward revision was due to more utility-scale projects coming online than expected in the fourth quarter of 2022.
Meanwhile, the residential sector increased by 40%, with a record 700,000 homeowners installing rooftop solar in 2022, according to the research.
The report forecasts steady growth until 2027, with an average of 19% a year.
Helping to spur that upswing is a surge in solar panel production within the U.S., with output projected to nearly triple to 25 GW from the current level by the end of this year, the report said.
U.S. President Joe Biden's Inflation Reduction Act, passed last year, has also helped stabilize the outlook for solar financing, the report said, by providing hefty subsidies to build renewable energy projects.
The increased availability of solar panels is likely to boost installations this year, after projects were hampered by U.S. bans on solar panels from China's Xinjiang due to concerns over forced labor.
According to Reuters, after months of blockage caused by the forced labor protection law, U.S. imports of Chinese solar panels are picking up.