Solar industry set to soar as US grapples with insatiable energy needs
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As Dan Shugar, the CEO of Nextracker Inc., stated, the unyielding demand for electricity in the United States is poised to overshadow obstacles confronting the solar industry, driving an unprecedented surge in panel installations.
Speaking at Bloomberg’s San Francisco bureau, Shugar highlighted utilities’ urgent quest for new energy sources to cater to the demands of burgeoning data centers, electric vehicles, and heating and cooling systems.
Simultaneously, with the retirement of traditional fossil fuel and nuclear power plants, solar emerges as a cost-effective and rapid solution, prompting a significant increase in deployment.
Following years of stagnant electricity demand, utilities anticipate the most substantial escalation in usage in decades.
According to the Boston Consulting Group, consumption at US data centers alone is anticipated to triple by the end of the decade, reaching up to 390 terawatt hours, equivalent to approximately 7.5% of the nation’s projected electricity demand.
Also read: New York set new records for hourly wind and solar generation
“Utilities need to keep the lights on and they need power,” said Shugar, whose company provides sun-tracking equipment and software that serve as the skeletal and nervous systems of solar plants. “it’s kind of showtime for the solar industry,” he added.
According to data from the US government cited by Nextracker, solar energy is the most rapidly expanding energy source in the United States, with a projected annual growth rate of 26% compounded through 2028.
Despite challenges such as permitting delays, connection issues for solar farms, and elevated capital costs due to rising interest rates, this growth trajectory remains robust, as Shugar emphasizes.
One major catalyst for this expansion is the significant number of solar projects currently in progress, made feasible by the steep decline in panel costs. Further driving this trend is the introduction of tax incentives embedded in President Joe Biden’s Inflation Reduction Act.
Capitalizing on these developments, Nextracker has revealed plans for establishing over 25 gigawatts of annual manufacturing capacity in the US.
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