The U.S. Solar Market is Growing at a Record Pace

Posted January 13, 2017

RELiON-Blog-Growth-in-the-Solar-Power-Market.jpg#asset:287 Q1 of 2023 Marks the Solar Industry’s Best First Quarter In History - The United States solar energy market is booming. In the last decade alone, solar has experienced an annual average growth rate of 24 percent. The percentage of electricity that comes from solar in the country is eleven times higher than it was a decade ago. In fiscal Q1 of 2023, the industry installed 6.1 gigawatts of capacity, making it the best first quarter in the industry’s entire history. The total nationwide solar capacity is now 149.5 gigawatts. That’s enough solar energy to power 26 million U.S. homes and reduce carbon emissions by 169 million metric tons annually, according to a report by the Solar Energy Institutes Association.

Solar energy capacity grew so fast that a new solar project was installed every 44 seconds, the SEIA report states. In the first quarter of 2023, there was a 47 percent increase from the first quarter of 2022, which puts the industry on track for another record-breaking year. Solar has also added the most generating capacity to the grid each of the last four years and did so again in Q1 of 2023, in which 54 percent of all new electric capacity added to the grid came from solar.

Of these new photovoltaic installations, 39.5 gigawatts are small-scale capacity and generation, which means they produce or store one megawatt or less. Of this capacity, 56 percent was in the residential sector, 36 percent in the commercial sector, and 8 percent in the industrial sector, according to EIA data.

As an article by Scientific American points out, solar power on a utility scale still represents a tiny fraction of the electricity supply in the U.S. Although solar power generation has continued to grow by 24 percent year-over-year, it only provides around 5 percent of the nation’s electric power, the Scientific American story states.

Solar panels growing in the market

How Solar Can Progress In The Future

So what’s holding solar back? The answer is surprisingly simple, batteries.

Photovoltaic technology has advanced to a point where the capture-to-storage ratio is high enough to meet an average household’s day-to-day needs, but our storage options are lagging far behind.

When the sun stops shining, the batteries stop charging and people using electricity start depleting the stored energy. If the demand is higher than the reserves, then whoever is drawing that electricity is going to be out of luck until the next sunny day.

The good news is a large portion of new solar capacity in 2022 was small-scale. Our current lithium-ion batteries, like RELiON’s Lithium Iron Phosphate chemistry (LiFePO4 or LFP), work well for handling day-to-day storage needs from a single home or commercial building—sometimes even two or three. But those homes and businesses must have a lithium-ion battery bank to store that energy, and having the solar panels and lithium-ion battery combo in every home and business in America isn’t feasible.

Plus, that’s not how the solar industry commonly works. The often-seen practice is leasing photovoltaic systems from the utility company to create energy and offset how much reliance a home or business has on the city's electrical grid. But once the panels stop producing energy, typically shortly after sunset, the users go back on the grid to pick up the slack.

As an article in IEEE Spectrum remarks, “Even in sunny Los Angeles, a typical house roofed with enough photovoltaic panels to meet its average needs would still face daily shortfalls of up to about 80 percent of the demand in January and daily surpluses of up to 65 percent in May.”

Without an opportunity to store all the energy solar panels collect in an on-site battery bank, the country will continue to rely on environmentally-destructive power sources like coal, nuclear, and natural gas.

The solution has yet to present itself, especially for mega cities like New York, Shanghai, or Hong Kong where the daily energy needs far surpass the storage capacity lithium-ion batteries provide.

Let’s take one of California’s largest storage systems as an example. In Long Beach, AES Corp. has built a massive lithium storage system consisting of more than 18,000 lithium-ion batteries. The storage bank is capable of running at 100 megawatts for roughly four hours, which is a total of 400 megawatt-hours. Yet as the IEEE Spectrum article states, 400 megawatt-hours are still two orders of magnitude lower than what a large Asian city would need to get through the day.

Although the technology might not be readily available to power a mega city off solar energy, if you need an energy solution for small or mid-scale residential buildings or commercial and industrial needs, then we can help. Get in touch with the RELiON team to see how lithium can solve your energy needs.