Installing solar panels at home can increase property values, save money, and reduce your carbon footprint. LeafScore’s head of research, and solar policy expert, Leigh Matthews is here to guide you step by step through the process, from finding local incentives, to choosing a reputable installer.
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The renewable energy sector in America had its fastest year of growth in 2021. Across the U.S. there are now enough solar panels to produce 121.4 gigawatts. This is enough, theoretically, to power 23.3 million homes.
Let’s take a look at the state of solar power in the U.S., with some fast facts extrapolated from data from the U.S. Energy Information Administration (EIA) and Bloomberg’s New Energy Outlook report for 2021:
- Solar and wind energy now account for 13% of power generation in the U.S.
- In 2021, year-over-year, energy production from hydroelectric, solar, and wind grew by more than 4%
- The U.S. currently meets 40% of its energy needs without fossil fuels (thanks to solar, wind, hydroelectric, and nuclear)
- Renewables contributed to a 35% reduction in power sector carbon emissions between 2005 and 2021
- In 2021, a new solar project was installed every 60 seconds in the U.S.
- SEIA predicts that more than one in seven U.S. homes will have a rooftop solar PV system by 2030.
This marks a sea change in what seems possible. Renewable energy production is no longer seen as a joke, producing little more than a rounding error. In fact, just nine cities in the U.S. generate more solar power now than the entire country did a decade ago, according to a 2022 report by the Frontier Group.
All that said, natural gas remains the biggest source of power in the U.S., accounting for 38% of 2021 production. And coal power actually rose in 2021 to 22% of the energy generated, though it’s down 40% from 2011, largely thanks to older coal plants being retired.
Wind power amounted to 138 gigawatts in 2021 and is likely to increase quickly as coastal projects come online in New York, New Jersey, Massachusetts, and Maryland. Similarly, solar capacity is set to increase dramatically in the U.S. and globally. Bloomberg New Energy Finance (NEF) projects that 2022 could be the first year in which more than 200 GW of solar will be installed worldwide.
Reader tip: as you move through the solar guide, keep in mind that one gigawatt can power around 750,000 homes.
How much solar power is installed in the U.S. today?
According to Bloomberg’s New Energy Outlook report for 2021, a colossal 37.3 gigawatts of wind and solar power infrastructure was installed in the U.S. in 2020. This included 24.2 gigawatts of solar, the most ever in a single year. Around 60% of this new solar capacity was utility-scale according to a report by Berkeley Lab. Utility-scale solar is commonly defined as any ground-mounted project larger than 1-5 MW.
Following a big year for solar in 2020, another 21 gigawatts-AC (GWAC) or 27 GWDC of PV were installed in the U.S. in 2021. This included a record 11.8 GWAC (16.3 GWDC) of PV in the first 9 months of 2021, or approximately 5.7 gigawatt-hours (GWh)/1.9 GWAC of energy storage added onto the electric grid (a 419% increase year-on-year).
All of this amounts to a total current solar capacity in the U.S. of more than 121.4 gigawatts. In theory, given that one gigawatt can power around 750,000 homes, infrastructure installed in 2020 alone could power an estimated 18 million more homes, and the total installed capacity could power around 16% of all homes in the U.S.
Such extrapolations are misleading, however, as much of the power goes to industry and commercial uses rather than residential needs. Installed capacity also doesn’t translate directly to generated or distributed capacity. Some power is lost along distribution networks or is never captured due to a lack of battery storage.
American states and cities producing the most solar power
Utility-scale PV really gained a foothold in the late-2000s in the sunny Southwest U.S. More recently, lower installation costs have facilitated the spread of solar to less-sunny regions, including the Southeast and along the East Coast, as well as into northerly states along the border with Canada.
California is by far the biggest solar power producer in the U.S., generating a staggering 48 thousand Gigawatt hours. Texas is next, generating 9.5 thousand GWh, followed by North Carolina (9.3 thousand GWh), Arizona (8.9 thousand GWh) and Florida (7.7 thousand GWh).
As for cities, Los Angeles has the most solar capacity of any in the U.S. Honolulu boasts the most per capita, followed by Las Vegas and San Diego.
These superstar cities are far from alone though. Compared to 2014, 15 cities have increased their total solar capacity tenfold. Nine cities alone now generate almost 3.5 GW and 34 cities produce more than 50 W of solar power per person.
What about global solar capacity?
Global solar capacity has also increased dramatically in recent years. India installed 177% more in the first nine months of 2021 than over the same period in 2020 and according to a report from Rystad Energy:
- Rooftop installations jumped 64% in five years, from 36 GW in 2017 to 59 GW in 2021
- Rooftop installations represent 30% of the total global solar capacity
- Rooftop installations in China alone increased from 19.4 GW to 27.3 GW from 2017 to 2021
- Australia leads the world in per-capita rooftop PV installations with 746 watts (WDC) per person
- Germany is second, with 668 WDC per person
- In Australia, the U.S. and the U.K. most rooftop PV systems power residential properties.
This is just for rooftop solar though. Most solar power capacity still comes from large-scale solar farms. Overall, global solar capacity increased by around 171 GW in 2021, with another 209 GWDC projected to be installed in 2022 and 231 GWDC in 2023.
It’s also important to note that not all solar power comes from photovoltaic panels. There is another type of solar technology that can convert the sun’s energy into a source of power: solar thermal, or concentrated solar power.
Is solar competitive yet?
In short, yes, solar power can be competitive with conventional energy sources in most states. There is wide variability, however, meaning it pays to do your research if cost of energy is your main reason for installing a home solar array.
In 2011 the U.S. Office of Energy Efficiency & Renewable Energy launched the SunShot Initiative. Overseen by its Solar Energy Technologies Office (SETO), this initiative had the goal of making solar electricity costs competitive with conventionally generated electricity, without subsidies, by 2020.
By 2017, SETO had already achieved its goal. Costs for utility-scale PV power had dropped to $0.06 per kWh compared to $0.05 to $0.17 per kWh for fossil fuels. Even the cost of residential- and commercial-scale solar had dropped to $0.16 and $0.11 per kWh, respectively, by 2017, again meeting SETO’s targets three years early.
Building on this success, SETO laid out more ambitious goals for 2030. This time, it wants to cut the levelized cost of energy (LCOE) of PV solar to $0.03 per kWh for utility-scale, and to $0.05 and $0.04 for residential and commercial PV solar respectively.
SETO also aims to cut the LCOE of concentrating solar power to $0.05 per kWh for baseload power plants by 2030. Other goals include addressing grid integration challenges and market barriers to support greater solar adoption.
Nowadays, solar power can cost anywhere from $30 to $221 per MWh. The cost of solar from a utility company is far lower than from home arrays, given efficiencies in larger, professional systems. However, once you’ve recouped the costs of a rooftop installation, you’re essentially getting power for free. In some cases, you may even be paid by the utility company if you’re connected to the grid and can take advantage of net metering.
In contrast, wind power already costs just $26 to $50 per MWh, though this is for big, commercial wind farms, not for residential applications. As for natural gas, it’s still cheaper (in the short-term), whether subsidized or not, coming in at around $24 per MWh for an existing plant. However, the cost of natural gas power from new plants is much higher at $45 to $74 per MWh, while the cost of solar and wind power decreases year on year.
Why is solar more expensive in the U.S.?
So far, we have only looked at the cost of electricity produced by solar arrays. This doesn’t tell us anything about the cost of installing such an array. For that, we can look at data from Rystad Energy, which notes that in the U.S. a 3-kilowatt residential rooftop PV system costs $4.6 per Watt direct current (WDC) to install. (Watts are a measure of power at a given moment in time, while Watt hours measure energy produced over a specific period of time.)
Since 2014, the average cost of solar PV panels has decreased by nearly 70%. However, panels only make up one part of a solar power system. We also need to factor in costs for an inverter, charge controller, and the cost of storing renewable energy, as well as installation and permitting.
Overall, the cost of storage for solar power has also decreased over time. However, energy storage capital costs increased during the COVID-19 pandemic due to supply chain constraints and inflation. Manufacturers are now looking to switch to lithium-iron-phosphate (LFP) storage technology from lithium-ion batteries for solar. This type of storage is less expensive and better able to hold a charge in extreme temperatures. As solar setups spread to less warm and sunny regions, better battery systems will be increasingly necessary.