U.S. Community Solar Market Sees Record Growth in 2024 Amid Policy Uncertainty, Reports Wood Mackenzie and CCSA

The U.S. community solar market reached a historic milestone in 2024, installing 1.7 GWdc of capacity, marking a remarkable 35% increase from 2023. This data comes from a report by Wood Mackenzie and the Coalition for Community Solar Access (CCSA). However, the future of this growth remains uncertain due to fluctuating national and state policies.

The expansion was primarily driven by states like New York, Maine, and Illinois, which collectively accounted for 83% of the national installations and achieved record annual figures. As a result, the total cumulative community solar capacity has now reached 8.6 GWdc.

Caitlin Connelly, a research analyst and lead author of the report, noted that while 2024 witnessed significant growth in community solar, leading state markets are approaching saturation, which could limit long-term expansion. Additionally, emerging markets have been slow to develop, and restrictions on program sizes hinder their capacity to compensate for declines in larger markets.

Wood Mackenzie’s base case scenario anticipates an average annual decline of 8% in community solar growth through 2029, eventually exceeding 15 GWdc of cumulative installations. Nevertheless, changes in policies and interconnection reforms could dramatically shift this trajectory. Connelly highlighted that the new U.S. administration has introduced considerable uncertainty in the solar sector, yet the material actions taken thus far have resulted in minimal changes to the base case outlook. In a pessimistic scenario, the five-year forecast could see a contraction of 40% compared to the base case, while stable federal policies and improved state regulations could push a high-case outlook 37% above the base case.

Emerging state markets could provide a boost, as legislative initiatives in Pennsylvania, Ohio, Missouri, Iowa, Georgia, Washington, and Wisconsin are gaining unprecedented momentum. These states demonstrate bipartisan support for community solar expansion, with some integrating it into broader energy strategies, such as Pennsylvania’s Lightning Energy Plan. If successful, these new markets could improve the base case forecast by at least 16% by 2029.

Connelly also pointed out that, despite ongoing opposition to newly legislated community solar programs, developers are adapting their business models and exploring innovative approaches to community-scale development. These resources are well-suited to enhance grid resilience and meet the increasing demand for electricity, as they can be deployed and scaled quickly while incorporating storage near customer load centers.

Community solar aimed at low-to-moderate income (LMI) subscribers is primarily concentrated in New York and Massachusetts, which together represent 49% of the 1 GWdc of LMI-serving capacity. Currently, LMI subscribers account for 14% of total community solar deployment. With stricter LMI participation requirements in new state programs, this capacity is projected to increase to 18% of total community solar by 2026. However, lingering uncertainty regarding federal policies related to the LMI Communities Adder and Solar for All funding could impede long-term growth.

Market concentration among top developers is evolving. In 2024, the top five community solar installers held a 19% market share, a decrease from 25% in 2023. In contrast, asset ownership remains more consolidated, with the top 10 owners controlling 54% of installations for the year and 40% of total cumulative capacity. Leading asset owners include Nexamp, AES Clean Energy, and Nautilus Solar.

Jeff Cramer, President and CEO of CCSA, emphasized that the record growth of community solar in 2024 reflects the increasing demand for affordable, distributed energy. This surge coincides with unprecedented customer and grid demand for community solar. Nonetheless, challenges such as interconnection delays and policy barriers are obstructing the deployment of new local power, stalling billions of dollars in investments and leaving millions of potential customers without access. Despite these challenges, growing bipartisan support to address these issues suggests a strong potential for continued record growth in the sector.