North America Should Harness Solar for Its Industrial Strategy

Power is central to the North American economy. Everything from the proliferation of massive data centers across the continent to support artificial intelligence (AI) to rapid densification and urbanization is predicated on growing energy demand. The US Department of Energy reports that domestic energy use from data centers has tripled in the past decade, and will double or triple again by 2028. 

The tech sector is illustrative of a broad trend across North America. After years of relatively steady energy consumption, demand is now spiking, requiring additional power production to come online as soon as possible. According to a recent Deloitte analysis, power demand will outpace supply by 2030 if more capacity doesn’t meet the market demand. This forecast is also bound to change as the United States and several tech CEOs recently announced the $500 billion Stargate AI project, which is focused on building infrastructure to support domestic AI research and development.  

To meet these demands, North America needs more than just energy; it needs diverse, distributed energy sources that promote energy independence, job growth, and climate resilience. Solar is the energy solution best positioned to mitigate short-term grid demands while ensuring long-term energy security. 

Solar’s prominent place in North American energy production 

While solar energy is only one part of North America’s power generation puzzle, it’s quickly becoming one of the most affordable and effective ways to generate electricity. The industry's relative maturity, compared with other renewable energy options, means that energy providers can quickly deploy solar across the nation and incorporate it into grids. 

A recent SEIA industry report found that solar energy accounted for 64 percent of all new electricity-generating capacity added to the US grid in 2024, generating enough electricity to power 37 million homes. In the US, solar energy was the only primary source of energy generation that experienced capacity growth, passing hydropower and nuclear power to become the fourth-largest source of installed capacity after wind. Texas and Florida are leading the charge, bringing 7.9 GW_dc and 3.1 GW_dc online through Q3 2024, respectively. 

Texas, in particular, which leads the United States in solar energy production, has increased its solar generation capacity by a staggering 800 percent since 2019. As a result, Texas now derives 30 percent of its electricity from solar, up from 18 percent in 2019. 

Similarly, Canada added 11,104 MW of solar power capacity, outpacing other energy sources, including fossil fuels and wind. Meanwhile, Mexico’s ambitious renewable energy plan aims to achieve 50 percent clean energy by 2030, with significant investments in solar farms nationwide. 

New domestic advancements in solar technology can also secure North American Energy dominance. Innovative solutions such as perovskites, a class of nanomaterials, are helping make solar manufacturing more energy-efficient and cost-effective. When processed under certain conditions, these materials yield low-cost and powerful perovskite solar cells. 

Having flexible solar solutions that produce more power while lowering installation costs will help accelerate the North American pathway to decarbonization and supply chain resiliency. In addition, the potential applications for perovskites go beyond terrestrial solar and includes building integrated photovoltaics (BIPV), automotive, and space. Its unique thin-film properties will allow industries to adapt to increasing demands for power. 

Community-wide benefits of domestic solar power production  

Solar is also one of the most affordable and effective ways to build a diversified and resilient energy infrastructure for future generations. It comes with significant upsides for communities, including: 

• Job creation

Renewable energy job growth continues to outpace the already strong US job market, representing 40 percent of all energy industry jobs. The US Department of Energy reports that clean energy jobs increased at more than twice the rate of overall US employment. The Inflation Reduction Act created over 334,000 jobs, and catalyzed $126 billion in direct private investment in communities across the United States. 

• Energy independence

Domestic solar production reduces reliance on volatile global fossil fuel markets, helping stabilize energy costs and ensuring supply security. As the United States continues to escalate tensions with China (with its monopoly on various minerals needed for energy solutions) homegrown solar technologies such as perovskites become an increasingly critical part of the dialogue. 

• Weather resilience

Natural disasters and extreme weather events occur with staggering frequency. Solar power coupled with distributed battery storage can ensure grid stability and faster recovery times. Recent wildfires in Southern California illustrate the importance of having more localized energy generation. As weather patterns shift, high-voltage transmission lines without backup energy solutions put more communities at risk of being out of power for longer.  

The road ahead  

As policymakers continue working with the private sector to onshore manufacturing jobs, solar generation should feature prominently in each country's respective industrial strategies. The COVID-19 pandemic, cascading geopolitical conflicts, and natural disasters make the case for shoring up domestic and continent-wide supply chains. 

To expand solar production and installation across North America, we need policies that drive technological progress and create a supportive ecosystem for companies of all sizes. Policy incentives should continue to be used as the primary driver of economic growth. As demonstrated by the IRA, smart industrial policy can create jobs and unlock billions in private investment. Its quantitative successes illustrate the importance of building on policy incentives to grow domestic industries.