US solar capacity is likely to grow by an additional 502 GW DC between 2025 and 2035
Policy uncertainty around the IRA and tariffs may hinder solar investment and project execution, warns Wood Mackenzie
Domestic solar module manufacturing capacity has the potential to grow to 144 GW, but a stable policy environment a must
The US is set to install 502 GW DC of new solar PV capacity over the next 10 years, according to Wood Mackenzie, which projects annual additions of 41 GW DC to 50 GW DC between 2025 and 2035 for the country.
This will represent growth over the 236 GW DC the market intelligence firm announced alongside Solar Energy Industries Association (SEIA) in March 2025, after the country installed a record 50 GW DC capacity in 2024. It would expand the country’s cumulative installed solar capacity to around 740 GW DC (see US Market Grew By Record 50 GW New Solar Capacity In 2024).
However, the realization of these projections hinges on policy developments, with significant uncertainty surrounding the future of the Inflation Reduction Act (IRA) and other measures that could affect project deployment, it cautions.
These key uncertainties facing the US solar industry at present include meeting the exponential load growth in the coming years, potential shortage of gas turbines before 2029, political uncertainty, especially regarding tariffs, and the future of tax credits and other provisions of the IRA; all this in times of growing electricity demand from the AI and data center sectors.
“Our forecasts show a potential 24% upside in the high scenario and a 25% downside in the low scenario compared to our base case,” said Wood Mackenzie’s Principal Analyst, North America Utility-scale Solar, Sylvia Leyva Martinez.
In addition, there are growing voices to phase out wind and solar tax credits in favor of nuclear, hydro and geothermal to provide grid stability (see US Republican Bill Seeks To Phase Out Wind, Solar Subsidies).
The uncertain policy environment in the US can also ‘jeopardize’ new investments in the solar PV manufacturing sector, warned Leyva Martinez, even as she expects the country’s solar module production capacity to increase from 17 GW in 2023 to potentially 144 GW by 2027. Additional growth in wafer and cell manufacturing is expected as well.
“These mixed market and policy dynamics are driving uncertainty in solar project development, and the industry will need to navigate these challenges carefully,” said Leyva Martinez.