SolarReviews’ 2022 survey reports continued growth of the solar energy industry, supported by the Inflation Reduction Act and tax credits available to businesses. With this increased demand, supply chain issues, labor shortages, and financing costs serve as obstacles to the industry’s continued expansion.
More solar manufacturers are setting up in North America, and many companies expect to further expand in the coming year. According to the SolarReviews survey, 73% of survey respondents expect to sell more solar in 2023, and a growing number of installers now offer energy storage and electric vehicle charger installation.
Despite increased demand for solar in 2022, 41% of respondents reported supply chain issues to be worse than in 2021. Along with the IRA contributing billions of dollars of investment in stateside solar manufacturing, these challenges could lead to more reliance on domestic production. For now, domestic supply chains are not strong enough to meet demand, and other impacts such as the recent decision to end President Biden’s solar panel tariff suspension could create more impacts on the industry in the United States.
Inflation remains a common barrier for solar businesses across the country. However, increases in electricity prices due to inflation were reported as a reason for increased demand for solar in 2022 as consumers attempt to cut down on utility bills.
Impact of the Inflation Reduction Act on Solar Industry Growth
This summer will mark a full year since the passing of the Inflation Reduction Act, which has programs intended to grow domestic energy manufacturing and production. The majority of the industry expects that the IRA will lead to further expansion of their business.
Solar companies are still figuring out how to take advantage of specific policies of the new law, according to the survey, but most expect that it will at least lead to an increase in demand. Respondents also report that of the IRA’s offerings, they are most likely to take advantage of Section 48 tax credits for the first time. A 30% tax credit is also now available to homeowners.
Few reported expectations that the IRA would help with worker shortages, another major obstacle to the solar energy industry’s growth. However, the law is expected to create millions of jobs, gradually, as new workers are trained and companies navigate new programs.
