Solar Industry Research Data
Solar Industry Growing at a Record Pace
Solar energy in the United States is booming. Along with our partners at Wood Mackenzie Power & Renewables and The Solar Foundation, SEIA tracks trends and trajectories in the solar industry that demonstrate the diverse and sustained growth of solar across the country.
Below you will find charts and information summarizing the state of solar in the U.S. If you're looking for more data, explore our resources page. In addition, SEIA Members have access to presentation slide decks that contain this data and much more. Not a SEIA Member? Join today!
Massive Growth Since 2000 Sets the Stage for the Solar+ Decade
In the last decade alone, solar has experienced an average annual growth rate of 33%. Thanks to strong federal policies like the solar Investment Tax Credit, rapidly declining costs, and increasing demand across the private and public sector for clean electricity, there are now more than 130.9 gigawatts (GW) of solar capacity installed nationwide, enough to power 23 million homes.
Solar as an Economic Engine
As of 2021, more than 255,000 Americans work in solar at more than 10,000 companies in every U.S. state. In 2021, the solar industry generated nearly $33 billion of private investment in the American economy.
Growth in Solar is Led by Falling Prices
The cost to install solar has dropped by more than 60% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $20,000 today, while recent utility-scale prices range from $16/MWh - $35/MWh, competitive with all other forms of generation.
Supply Chain Constraints Lead to Price Increases
However, over the last 18 months, shipping constraints and other supply chain challenges stemming from the global pandemic and trade instability have led to price increases across the U.S. solar industry. For the fifth consecutive quarter, year over year prices have increased across all market segments leaving utility-scale solar prices 12.7% higher than they were a year ago. Price increases have impacted deployment, with 2022 installation forecasts dropping from 30 GW to 15 GW over the last year.
Solar's Share of New Capacity has Grown Rapidly
Solar added the most generating capacity to the grid three consecutive years and is on track to do so again through the first half of 2022. In 2021, 46% of all new electric capacity added to the grid came from solar, the largest such share in history. Solar has ranked first in new electric capacity additions in each of the last 9 years. Solar’s increasing competitiveness against other technologies has allowed it to quickly increase its share of total U.S. electrical generation - from just 0.1% in 2010 to over 4% today.
The U.S Solar Industry is a 50-State Market
While California has traditionally dominated the U.S. solar market, other markets are continuing to expand rapidly. In 2021, states outside of California made up their largest share of the market in the last decade, led by rapid growth in Florida and Texas. As demand for solar continues to grow, new state entrants will grab an increasing share of the national market.
Prices Decline for Rooftop Solar, but Higher Soft Costs Remain
The biggest cost-decline opportunity in residential and small commercial solar exists in soft costs, which includes installation labor, customer acquisition, and permitting/inspection/interconnection. While the soft cost share of total system costs has stabilized in recent months due to increased customer demand, rising hardware costs and pandemic-related improvements to permitting practices, U.S. solar soft costs continue to be much higher than those of other developed solar markets around the world. Through programs like Solar Automated Permit Processing (SolarAPP) and SolSmart, SEIA and our partners are working to reduce local barriers to going solar.
Storage is Increasingly Paired with All Forms of Solar
Homeowners and businesses are increasingly demanding solar systems that are paired with battery storage. While this pairing is still relatively new, the growth over the next five years is expected to be significant. By 2025, over 29% of all new behind-the-meter solar systems will be paired with storage, compared to under 11% in 2021. The utility-scale market is also recognizing the benefits of pairing solar with storage, with over 45 GW of commissioned or announced projects paired with storage, representing over 50 GWh of storage capacity.
Residential Market Continues to Diversify
The residential solar market experienced its 5th consecutive record year in 2021, growing 30% over 2020 with 4.2 GW installed. Customers continue to be motivated by increasing household electricity bills brought on by the pandemic, power outages and low financing costs. That growth is threatened however, by proposed changes to Net Metering rules in multiple states. In California’s NEM 3.0 case, the proposed decision issued by the Public Utilities Commission could cut the California market in half by 2024. Details on future NEM 3.0 proposals are forthcoming.
Corporate Clean Energy Goals Boost Commercial Solar
The commercial solar market, which consists of on-site solar installations for businesses, non-profits and governments, has grown unevenly in recent years as the industry continues to unlock the financing tools needed to provide access to a wide swath of business types. However, increasing adoption by commercial, non-profit and public entities with clean energy goals bodes well for future growth in this segment. With a little more than 1% of commercial electricity demand served by on-site solar, there remains significant opportunity for growth.
New State Entrants Help Fuel Community Solar Growth
While early growth for community solar installations was led primarily by three key markets - New York, Minnesota, and Massachusetts - a growing list of states with community solar programs have helped diversify the market, creating large pipelines set to come to fruition over the next several years. Continued growth in state community solar programs and improvements to state and regional interconnection processes are imperative to ensure solar access for all types of homeowners and businesses.
Large Utility-Scale Solar Pipeline Outpaces Installs
The utility scale solar market has experienced several ups and downs in 2022. A June executive order put a pause on solar tariffs until 2024, allowing manufacturers to resume module shipments after circumvention petitions threatened high duties on imports from Southeast Asia. Weeks later, the implementation of the Uyghur Forced Labor Prevention Act led to detained shipments, insufficient module supply and continued project delays. Despite this, new project procurement has rebounded with the 10 GW of new projects contracted in Q2 2022 representing the highest quarterly total since 2019. Demand for utility-scale solar should remain strong as the Inflation Reduction Act will bring certainty and supply stability as an increasing numbers of states, utilities and corporations seek to fulfill their clean energy goals.
Solar PV Growth Forecast
Pricing and procurement challenges have greatly impacted deployment in 2022, resulting in forecasted deployment levels reaching their lowest point since 2019. However, a return to a steady state of supply in 2023 should put the solar market back on track. The Inflation Reduction Act is expected to bring about unprecedented growth in the industry. Over the next five years, the industry is expected to install nearly 200 GW of new solar capacity, more than doubling the amount of solar currently installed. The legislation provides key tax incentives and long-term certainty that will spark demand for solar and storage and accelerate the transition to renewable energy.
Inflation Reduction Act Boosts Solar Outlook
The passage of the Inflation Reduction Act has drastically improved baseline projections for the solar industry over the next five years. In the next half decade, the long-term tax incentives and manufacturing provisions in the IRA provide the market certainty needed to boost expected solar deployment by over 40% compared to pre-IRA projections. Though supply chain issues limit the impact of the IRA in the near term, its passage creates massive growth potential as new manufacturing capacity comes online and other supply barriers are addressed.
More Aggressive Growth Needed to Reach Climate Goals
While projected growth over the next 10 years spurred by the IRA puts the solar market in reach of ambitious clean energy goals set by the industry and the Biden administration, more work is needed to achieve the pace required for a 100% clean energy electricity system. Annual installs will need to grow from less than 25 GW in 2021 to more than 130 GW by 2030, with cumulative totals over 800 GW by the end of the decade. A combination of private sector innovation and stable, long-term public policy will set the solar industry on a path to achieving these more aggressive goals to address climate change and decarbonize the economy.
Solar Helps Fortune 500 Companies Save Money
Data from SEIA's annual Solar Means Business report show that major U.S. corporations, including Apple, Amazon, Walmart, Target, and Google are investing in solar and renewable energy at an incredible rate. Through 2019, the top corporate solar users in America have installed more than 8,300 MW of capacity across more than 38,000 different facilities across the country.
Other key takeaways:
- Corporate solar adoption has expanded rapidly over the past several years, with two thirds of all capacity installed since 2015.
- The 1,286 MW installed in 2019 represents a 10% increase from 2018 and is second to only 2017 for annual commercial deployment.
- The surge in on-site commercial solar continued in 2019, with a record 844 MW installed, while 441 MW of off-site projects were completed.
- The systems tracked in this report generate enough electricity each year to power 1.6 million U.S. homes.
You can explore SEIA's Solar Means Business report, including interactive maps and data tools on the top corporate solar users in the U.S.