Solar energy is one of the fastest-growing sources of power generation in the US. In just 10 years, solar skyrocketed from 1.2 billion kWh of generation to over 90 billion kWh.
While that’s only a small percentage of the energy mix, the rate of growth is accelerating. The US Energy Information Administration predicts that by 2022, solar capacity will outpace wind for the first time on record.
Like other industries, the solar industry is dealing with hardships from the COVID-19 pandemic, however. It’s poised for a comeback in 2022, however, and here are the states leading the charge, according to the Solar Market Insight Report.
Top States for Solar Energy
Based on figures from the Solar Market Insight Report, these states are:
|State||Cumulative Solar Capacity (Megawatts)||Homes Supplied by Solar Energy|
California ranked as the top state for solar by a long shot. The Golden State has nearly 300 sunny days a year, so it’s no surprise that solar is a booming business. The state also invested over $73 billion in solar technology and provides tax incentives for residents to get solar panels for their homes.
Texas has its own power grid, but it’s one of the top states for solar installation. There’s a big gap between California and Texas, however, even being two of the largest states in the US. The state’s total solar energy investment is around $11 billion, and it gets about 2% of its electricity from solar. Texas still has massive potential for growth in the solar industry, however.
North Carolina has a strong commitment to solar energy that secures it in the top five states. The state sees a lot of sunny days each year and gets approximately 7.5% of its electricity from solar, which is more than Texas and Florida.
Dubbed “The Sunshine State,” it’s expected that Florida would invest in solar energy. With almost $10 billion total solar investment and over 3% of the state’s electricity coming from solar, there’s still a long way to go for Florida to make the most of its year-round sunshine.
Arizona has dry heat and desert environments, securing a spot in the top five solar states. The state invests heavily in solar energy, coming in second only to California in funding, and roughly 8% of the state’s electricity comes from solar energy.
Nevada has abundant open land areas and some of the best solar potential in the country. Currently, Nevada has over 15% of energy coming from solar power.
In 2020, New Jersey was the sixth-largest producer of electricity from solar energy and ranked third in generation from small-scale solar generating systems, such as rooftop solar panels. Overall, solar power accounts for over 6% of the state’s electricity.
Massachusetts has surpassed its aggressive target of 1600 MW of solar power installed for 2020. Currently, solar energy accounts for around 19% of the total in-state electricity, and almost two-thirds of the solar electricity generation in all of New England.
Georgia is another state that enjoys plenty of sunshine. Solar energy provides around 3% of the state’s in-state electricity net generation, and almost all of it comes from utility-scale facilities with over 1 MW of capacity.
Trends in Solar
As illustrated by this list, geography and climate aren’t the only factors that determine whether a state can become a solar leader. East Coast states like Massachusetts and New Jersey wouldn’t come to mind as the next solar powerhouse, but relative to their size, they’re on the list with giants like California and Texas.
This disproves the idea that solar power is only accessible or popular in states with tons of sunshine. In fact, solar panels only need about four hours of direct sunlight each day to collect energy, and the rest is reserved for cloudy and overcast periods. Homeowners and business owners on the grid won’t be subjected to outages, and they may even gain incentives with net metering.
This is due in part to policies that incentivize solar adoption, such as North Carolina’s generous Solar Property Tax Exemption and Georgia’s Investment Tax Credit. On the federal level, the US government offers the Federal Residential Renewable Energy Tax Credit, which is a 26% deduction on taxes for:
- Solar PV panels or cells
- Permitting and inspection
- Contractor labor costs for installation
- System equipment, such as wiring and solar inverter installations
- Sales tax on eligible expenses
The tax credit pertains to systems installed between 2020 and 2022. After that, the rate will decrease to 22%. It’s expected to expire in 2024 unless Congress choose to renew it.
As tax incentives expire, new policies come into play, and other market forces impact solar adoption, states can quickly gain ground and lead the pack.
The Future of Solar
The solar energy market is hot and still growing. Solar still only provides a fraction of the total energy generated in the US, however. Some states and regions are seeing more potential and installation of solar energy in their power mix, but we can expect to see greater adoption in the coming years.
In addition, the consumer demand for solar is growing. 19% year-over-year growth is expected, bringing the residential market to a total of 3.8 GW of solar capacity.
And according to Precedence Research, the global solar power market size is expected to be worth around $368 billion by 2030, and growing at a CAGR of 7.2% from 2021 to 2030.
The Trend is Clear
Americans are getting on board with solar. As the industry sees greater adoption and more incentives, it’s expected that solar will take up a larger portion of the energy mix. These 9 states may be leading the pack with solar now, but that could quickly change as other states begin to realize the value and potential of clean, renewable energy.