Wood Mackenzie forecasts that annual solar installations will range between 40 GW and 50 GW, with a gradual decline through 2028, followed by modest growth into the mid-2030s. This trajectory would nearly triple the cumulative solar capacity in the U.S., which reached 236 GW by the end of 2024, as reported by the Solar Energy Industries Association.
Leyva Martinez emphasized that policy changes could significantly alter these projections, stating: “Our forecasts show a potential 24% upside in the high scenario and a 25% downside in the low scenario compared to our base case. The future of the Inflation Reduction Act (IRA) and other policy measures will play a key role in project materialization, and many things can change during this uncertain policy environment.” Key uncertainties include meeting rising electricity demand, potential gas turbine shortages before 2029, and evolving tariff policies.
The anticipated surge in electricity demand, driven largely by AI data centers and electrification, poses challenges for the industry. Leyva Martinez noted: “The Trump administration will need to balance its AI and data center ambitions with the energy reality. These mixed market and policy dynamics are driving uncertainty in solar project development, and the industry will need to navigate these challenges carefully.”
Additional constraints include persistent grid interconnection delays and labor shortages, which could hinder future solar development. However, U.S. solar manufacturing has seen significant growth. Leyva Martinez highlighted: “We’ve seen exponential growth in domestic manufacturing over the past three years. Module manufacturing capacity is projected to increase from 17 GW in 2023 to potentially 144 GW by 2027, with additional growth in wafer and cell manufacturing capacities.”
In 2024, domestic solar module assembly capacity grew by 190%, from 14.5 GW to 42.1 GW, with significant production increases in Texas (8.6 GW) and Georgia (8.4 GW). Despite this progress, Leyva Martinez cautioned: “Challenging trade policies may jeopardize new investments in the sector.” The industry’s ability to adapt to these dynamics will be crucial for sustaining growth and meeting energy demands.
