Increase by 40%! The Inflation Reduction Act will promote the rapid growth of photovoltaic installed capacity in the United States
Release Date: 2022-09-09 Visit: 338 Source: TIDE SOLAR INC.

According to the prediction made by the American Photovoltaic Industry Association (SEIA) and the research organization Wood Mackenzie in the recently released Third Quarter Report of American Photovoltaic Market Insight 2022, by 2027, the Inflation Reduction Act is expected to help the American photovoltaic market increase the photovoltaic system by 62GW, an increase of 40% compared with its basic forecast.

According to the prediction of Wood Mackenzie, the installed capacity of the utility scale photovoltaic system installed in the next five years is 162GW, which will lead the growth of the U.S. photovoltaic industry. By 2027, the cumulative installed capacity of photovoltaic systems in all market segments will increase nearly twice, from the current 129GW to 336GW.

Abigail Ross Hopper, president and CEO of the American Photovoltaic Industry Association, said: "This report provides an early view on how the Inflation Reduction Act will change the energy economy in the United States. It is predicted that the wave of clean energy and manufacturing investment will improve the level of communities across the country. With this rare opportunity, we can ease our concerns about forced labor and ensure that we have an ethical supply chain around the world."

Due to the influence of the tariff investigation of the U.S. Department of Commerce, the research institute's prediction on the installed capacity of photovoltaic systems installed in the United States in 2022 has dropped to 15.7 GW, which is the lowest level in the U.S. photovoltaic market since 2019; The so-called Forced Labor Prevention Act of the United States, which came into effect on June 21, and other trade restrictions have also been affecting the PV module supply chain.

Wood Mackenzie predicted in the report that the Forced Labor Prevention Act may reduce the deployment of photovoltaic systems in the United States before 2023 due to the availability limitation of photovoltaic modules, which will also affect the positive effects of the Inflation Reduction Act.

Michelle Davis, chief analyst of Wood Mackenzie Company and the main author of the report, said: "The Inflation Reduction Act provides an unprecedented long-term certainty for the photovoltaic industry. The provision of a 10-year investment tax credit is in sharp contrast to the one-year, two-year or five-year extensions that the industry has experienced in the past decade. It is no exaggeration to say that the Inflation Reduction Act will lead the U.S. photovoltaic industry into a new era."

In the face of power outages and rising electricity prices, users' demand for rooftop PV is at a historical high. The field of roof photovoltaic in the United States set a record for the fifth consecutive quarter, and nearly 180000 households installed roof photovoltaic systems in the second quarter of this year. The Inflation Reduction Act will promote the United States to increase 7.3GW of rooftop photovoltaic systems in the next five years, while the tax credits available for independently deployed energy storage systems deployed in all market segments will improve the reliability of the power grid.

Although supply chain restrictions have slowed down the development of the U.S. photovoltaic market, photovoltaic systems still account for 39% of the total installed capacity of new power generation facilities in the first half of 2022 in the United States. PV power generation in the United States currently accounts for about 4.5% of the total power generation.