Solar Energy Trends: Market Growth and Forecast

Solar energy is a necessary part of our present and future. Without it, we will be unable to reach our clean energy goals.

Although solar energy is a constant, several trends define today’s market and determine the adoption rates. This article will look at these trends to provide a picture of what the industry will look like moving forward.

Market Growth

2023 saw unprecedented solar market growth increasing by a percentage point within the year. The Inflation Reduction Act and other green incentives were responsible for a 55% increase in new solar electricity generation. They brought the total installed solar capacity to 161 GW.

Solar is expected to continue growing through 2024. A 10% increase is predicted for 2024. It will cause solar output to account for more than half of U.S. capacity by the end of the year. 

Growth is expected to resume at an elevated pace in 2025.  By 2028, solar capacity is forecasted to reach 377GW, enough to power over 282 million homes.

What Factors Support Solar Market Growth?

Several factors support market growth. Here are some to consider:

The Need to Address Climate Change and Environmental Pollution

Climate change is becoming hard to ignore. The United Nations has named it the “single biggest health threat facing humanity.” Environmental factors take the lives of about 13 million people each year. 

The warmer temperatures create habitats that promote mosquito-borne illnesses and worsen health conditions in general. It interferes with access to clean air and water negatively affecting farming and food quality. Rising waters could destroy coastal homes increasing the rate of homelessness. 

People realize something must be done. Solar is an effective solution. 

Government Incentives

Governments throughout the country are doing their part to make solar more accessible. The federal tax credit is available for all United States solar panel owners. It provides tax credits equal to 30% of installation costs. 

Many state governments also provide local incentives to boost solar in their area. 

Reduced Cost of Solar Panels

The reduced cost of solar panels means going solar is more affordable. An average rooftop system is now about $25,000, half of what it was last year, and prices are expected to drop even further. The increased affordability is mostly due to developments in the industry. 

Government incentives are largely responsible for the price drops. They provide more stability in the solar industry allowing business owners to make long-term investments, grow their staff, and integrate more efficient processes. They can pass on their savings to customers to make systems more affordable.

How Will Inflation Affect Growth?

The world is in better shape economically than it was in 2023. The Federal Reserve seems to have a handle on inflation. However, electricity and gasoline prices continue to rise due to global demand.

The phenomenon makes solar more attractive. People can take advantage of lower interest rates when financing solar systems and EVs while saving money on gas and electricity.

They can save even more on their electric bills with Power Purchase Agreements (PPAs). PPAs are solar power purchase agreements in which a third party owns the panels, and the homeowner purchases the electricity generated at a pre-negotiated price.  The contracts are long-term and permitted in a limited number of states.

Other ways to save include net metering, which involves selling the solar energy your panels generate back to your utility company, and the Federal Tax Credit which can reimburse solar owners 30% of their solar and installation costs.

The Community Solar Trend

Community solar helps make clean energy more accessible. Community solar serves multiple residents. The system is ideal for people who live in apartments and condos or cannot install panels in their homes.

The panels are typically located somewhere in the community, like a field or parking lot.  Residents who sign up for the program receive a share of the electricity the panels produce. It can typically lower energy bills by 5-10%.

Experts predict that community solar will become more popular in the coming years. It is expected to reach approximately 14 GW of capacity by 2028, with an average annual growth of 8%. Policy developments will support the growth.  

Increases in Solar Jobs

According to the 2022 National Solar Job Census, more than 263,000 people are working in the U.S. solar industry. The growth of solar jobs is five times faster than the overall job rate in the country.

The position of the solar photovoltaic installer is predicted to be one of the fastest-growing occupations between 2021 and 2031, with a27% expected growth rate.

Product Insights

When we think of solar products, we typically think of solar panels, so it’s no surprise that they account for much of the industry revenue. Their installation capacity increased by more than 22% between 2022 and 2021 accounting for 41.45% of overall revenue.

However, solar panels are not the only game in town. Other solar products include charge controllers, batteries, inverters, transformers, etc.. Charge controllers, which protect the battery and inverter from high voltage damage, are also in demand. They are expected to continue this trajectory through 2030.

Inverters that convert DC charge to usable AC charge have also seen demand increases due to advanced technology and reduced prices.

Storage Demand Increases

Speaking of product insights, storage is a powerful contender worthy of its own section. Batteries, which are often used for solar storage, are a popular solar item. Prices are falling while advocates are focusing on creating a competitive storage model.

A Solar Energy Industries Association (SEIA) report revealed that solar energy and storage pairing accounts for most interconnection products worldwide. 6% of wind and natural gas projects include storage. 34% of upcoming solar projects are paired with batteries.

The report goes on to state state that storage will play a necessary role in reaching our 2030 goal of solar accounting for 30% of all electricity generation.

The agency is attempting to make storage for solar more accessible by lobbying for tax incentives, facilitating the permit process for solar and storage projects, and researching investments that will make storage more affordable.

Growth Throughout the United States

California has long been a leader in solar growth in the United States, but many other states have seen advancements in the past few years. Texas was the leading state in new solar installations in 2024. California, Florida, Indiana, and Virginia rounded out the top five.

It may be no surprise to see sunshine states like Florida, Texas, and California coming in the top spots for solar installation, but many other states with colder climates are making strides in solar thanks to government incentives. North Carolina’s Solar Property Tax Exemption, Virginia’s net metering allowance, and Indiana’s solar easement laws are all shining examples.  

Industrial Applications Boost the Solar Market

Industrial applications are responsible for unprecedented growth in the solar market. In 2019, it accounted for 35% of the United State’s total energy consumption and 32% of its end-use consumption. It plays a key role in helping the U.S. Department of Energy reach its 2050 solar goals. 

Solar thermal power is often used instead of fossil fuels in various industrial applications. With industrial fossil fuels accounting for 15% of the United State’s carbon emissions, solar power can make a considerable improvement in this sector. It can be integrated into chemical production refinement, the manufacturing of iron and steel, and food and beverage industries. 

Industrial solar uses sunlight to create heat, which is used in many manufacturing processes. Under ‘traditional circumstances’, fossil fuels are tied to heat energy production. When solar is integrated, mirrors direct heat onto a receiver and transfer it into a fluid used in industrial applications. 

Solar heat can achieve a wide range of temperatures from 400-1000 degrees Celsius. As a result, it is used in various industrial processes. Popular ones include: 

Solar-Powered Food Production

Solar heat production is used in the food industry for everything from dairy pasteurization to nut processing. Horizon Nut used a solar process to make steam, which was used to blanch, pasteurize, and roast nuts replacing an energy-intensive process. Similar processes were used to pasteurize dairy products and even to roast chiles. 

Solar Desalination

Water desalination involves removing salt from seawater. It is typically an expensive process that uses excessive energy and disrupts ecosystems. The solar process is not only more energy efficient, but it also allows additives to be reused making it an even more efficient solution.

Solar America is Helping the U.S. Reach Its Solar Market Growth Goals

The road to 100% solar adaption is not an easy one to travel, but Solar America is helping the country every step of the way. We provide free, no-obligation quotes so you can find the solar installer that’s right for you. We have helped millions of homeowners lower their carbon footprint and we can help you too.

Submit your information and we will help you find an installer in your area.

"I’d put my money on the sun and solar energy. I hope we don’t have to wait till oil and coal run out before we tackle that." - Thomas Edison

"I’d put my money on the sun and solar energy. I hope we don’t have to wait till oil and coal run out before we tackle that." - Thomas Edison