While the first half of 2022 may not have been the best of times for solar power, the industry is poised for rapid growth in the second half of this year and beyond.

According to a report released by the Solar Energy Industry Association and Wood Mackenzie, a research and consulting firm, the industry has faced challenges recently, and total installed capacity declined in the second quarter of 2022. However, that trend is projected to reverse as various factors favor positive growth ahead.

Published on Sept. 8, 2022, the U.S. Solar Market Insight Q3 2022 report highlights the major trends in the U.S. solar industry. It finds that the U.S. solar market installed 4.6 gigawatts (GW) of capacity in the second quarter, which was a 12% decrease from the same quarter in 2021. Supply chain constraints and the U.S. Department of Commerce’s investigation into the trade practices of international suppliers are mostly to blame for the decline.

However, other positive signs abound. For example, despite the year-over-year decline, second quarter installations represented a 12% increase from the first quarter of 2022. Furthermore, solar accounted for 39% of all new electricity-generating capacity added to the U.S. grid in the first half of 2022.

Positive signs can also be found when installations are further broken down by industry segments. For example, the residential segment has been on a consistently upward trend. Installations set a record for the fifth consecutive quarter, with 1.36 GW installed. That's a 37% increase from the same quarter of last year and a 7% increase from the first quarter of 2022.

Commercial solar installations are on a slightly different path. Only 336 megawatts (MW) were installed in the second quarter, which is a 7% decline from the same quarter of last year, but a 13% increase from the first quarter of this year.

Community solar saw slightly fewer installations, with 228 MW. This is down 15% in the second quarter year-over-year and down 2% quarter-over-quarter in 2022.

Finally, the utility sector saw 2.7 GW installed, which is a 25% decrease from last year’s second quarter and a 17% increase from 2022’s first quarter.

With these growth trends as a backdrop, the study sees the historic passage of the Inflation Reduction Act in August as “a massive growth catalyst for the solar industry.” The authors expect total solar deployment to increase by 62 GW, or 40%, over the next five years.

Header image by Anders J / Unsplash.