(Reuters) - Solar energy accounted for 84% of new electricity generation capacity added to the U.S. power grid last year, but the industry faces a challenging future with the new U.S. administration's energy policies, a report published on Tuesday said.
The country installed 50 gigawatts (GW) of new solar capacity in 2024, the Solar Energy Industries Association (SEIA) and Wood Mackenzie groups said in the report, adding that 2024 was largest single year of growth by any energy technology in over two decades.
WHY IT IS IMPORTANT
The solar industry was a major beneficiary of subsidies contained in former President Joe Biden's landmark 2022 climate change law, the Inflation Reduction Act (IRA).
The Trump administration has said it was reviewing federal funding plans, and any removal of tax credits issued under the 2022 Inflation Reduction Act would impact clean energy deployment.
The clean-energy sector has been on high alert since the election of Donald Trump, whose first executive orders prioritized unleashing U.S. fossil-fuel production, paused federal wind projects and froze funding for clean-energy projects from two Biden-era laws.
BY THE NUMBERS
Total U.S. solar capacity is expected to reach 739 GW by 2035, the report said, warning that changes to federal tax credits, supply chain availability, and permitting policy will cause slowdown in solar deployment.
The low case forecast showed a 130 GW decline in solar deployment over the next decade compared to the base case, representing nearly $250 billion of lost investment, according to the report.
KEY QUOTES
"Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market," said Sylvia Levya Martinez, Principal Analyst, North America Utility-Scale Solar for Wood Mackenzie.
"We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry's continued growth."
(Reporting by Gnaneshwar Rajan in Bengaluru and Nichola Groom; Editing by Lincoln Feast.)