Fewer Delays for New Solar Capacity Projects During 2023: EIA

According to a report published on May 8 by the U.S. Energy Information Administration there were fewer interruptions to mount new utility scale solar photovoltaic (PV) projects in 2023 compared to 2022.

Solar developers postponed the scheduled start date for an average of 19 percent of planned solar capacity compared with an average of 23 percent in 2023. Despite the percentage of year-on-year solar capacity reporting delays declining during 2023, it remains significantly higher than the average share of interruptions between 2018 and 2021.

Utilities have been increasing their solar production capacity throughout 2023. There has been a 27 percent increase in solar capacity during 2023, compared to existing solar capacity at the end of 2022. Solar has been the fastest growing renewable energy source in the U.S. due to larger capacity additions and favourable tax credit policies. The agency expects solar projects to elevate solar capacity functioned by the electric power sector by 38 percent from 95 gigawatts (GW) during 2023 to 131 GW in 2024. Solar projects have also been incentivized due to lower costs, battery storage and other policies that provide motivations for adding additional renewable energy sources. The demand for battery storage continues to rise, in line with higher solar and wind capacity across the U.S. The ability to store electricity during lower demand periods and utilized during peak periods, will help reduce price volatility and ensure security of supply. The 2022 Inflation Reduction Act has incentivized the expansion of energy storage by introducing investment tax credits for stand-alone storage.

The delay in solar projects can usually be attributed to construction issues, equipment testing, uncertainties involving permits and the obtainability of building materials. Moreover, solar project deployment is usually impacted by U.S. trade policy, since materials are imported from international markets. As it stands, U.S. tariffs that impact Chinese manufacturers of Solar PV cells and modules in China are deferred by a Presidential Proclamation until June.

The agency projects the electric power sector to add around 6 GW of solar capacity during the first quarter of 2024. An additional 24 GW is in the testing or construction phase, whilst around 6 GW is in the permitting or planning stage.