Solar Remains Fastest Growing Energy Source In US, Producing More Electricity Than Hydro In 2023

Solar energy generation in the U.S. has increased by 14.3% year-to-date in 2023 relative to 2022, as the US Energy Information Agency (EIA) released in its November 'Electric Power Monthly' report.

Solar's growth once again outpaced all other energy sources, including natural gas, and surpassed hydroelectric power in total generation for the first time.

Wind energy net generation declined by 2.7% from 2022 to 2023, the EIA reported, reflecting the industry's delays in constructing multiple planned offshore wind facilities in the US, particularly along the northeast coast.

Nuclear energy, a recent focus of the Biden administration's energy strategy, saw just 0.2% growth in net generation from 2022 to 2023.

Solar energy has remained the fastest growing energy source in the U.S. since 2011, according to EIA figures, but still accounts for a relatively small share of the U.S. energy output compared to fossil fuel sources.

Net generation from natural gas from January to September of 2023 was 1,378,574 GWh, up 7.3% from the same period in 2022. Total solar power generation (including utility-scale and small-scale operations) over the first nine months of 2023 was 188,817 GWh, equal to 13.7% of natural gas' total.

Natural gas remains the most consumed power source in the U.S., accounting for over 40% of total electrical generation. Texas recently launched plans to expand investment in its natural gas power footprint, which was approved by voters in a ballot initiative in early November.

As the U.S. green energy capacity expands, so does its fossil fuel output. U.S. domestic natural gas production will reach record levels in 2023, the EIA predicts. The U.S. is currently the world's leading producer of both natural gas and oil products.

The combined generation of all renewable, non-hydroelectric energy sources still remains below the U.S. electrical output from coal (491,894 GWh vs 516,575 GWh). Coal's electricity generation footprint shrank by 20.2% between 2022 and 2023, mirroring similar declines in petroleum liquids (-17.9%) and petroleum coke (-21.8%).

But if solar installations continue at the current multi-year pace of 10%+ annual gains, the U.S. share of green, renewable energy used for electrical production will rise accordingly. Combined solar and wind energy capacity in the U.S. has accounted for 15.5% of total electrical generation so far in 2023, up from 14% in 2022.

The Inflation Reduction Act of 2022 (IRA), the Biden administration's signature piece of climate legislation, has already allocated billions of dollars in loans and tax credits to promote domestic solar panel consumption in a bid to further increase the U.S. solar capacity.

The IRA's solar energy objectives face a variety of constraints including high global interest rates, competition from Chinese manufacturers and domestic political opposition. Still, industry experts predict the legislation will provide the support needed to maintain the industry's sustained gains in the long term.