United States (US) Solar Photovoltaic (PV) Market Analysis by Size, Installed Capacity, Power Generation, Regulations, Key Players, and Forecast to 2035
Introduction

US Solar Power energy Market has emerged as a pivotal component in the United States' transition to renewable energy. Driven by technological advancements, policy incentives, and the increasing need for sustainable power, the U.S. solar PV market has experienced remarkable growth. Currently one of the fastest-growing sources of electricity, solar PV is expected to play an even larger role in the U.S. energy mix as the nation targets carbon neutrality. This analysis provides a comprehensive overview of the U.S. solar PV market, covering market size, installed capacity, power generation, regulatory influences, key players, and a forecast through 2035.

1. Market Size and Installed Capacity

The U.S. solar PV market has grown considerably over the past decade, with total installed capacity reaching approximately 150 GW by 2023. The market size in economic terms includes investment in new solar installations, solar equipment manufacturing, maintenance, and operation. Residential, commercial, and utility-scale installations contribute to this growth, with utility-scale projects accounting for the largest share.

Key Market Size Trends:

• Declining Costs: The cost of solar PV has decreased by around 70% over the past decade, making it a more attractive option for both private and utility-scale applications.
• Increase in Utility-Scale Projects: Utility-scale solar projects dominate in terms of capacity, driven by state mandates for renewable energy and corporate procurement of solar power.
• Residential and Commercial Demand: Demand for rooftop solar continues to rise, spurred by net metering policies and incentives at state and federal levels.

2. Power Generation and Demand

In 2022, solar PV accounted for approximately 5% of the U.S. electricity generation, producing around 220 TWh. This share is expected to rise as more capacity is added and as states adopt more ambitious renewable energy targets.

Factors Influencing Power Generation:

• Solar Efficiency Improvements: Technological advances have improved panel efficiency, enabling more power generation per unit area.
• Energy Storage: Increasing investment in battery storage solutions supports solar power’s integration into the grid, making it a more stable and reliable energy source.
• Distributed Generation Growth: With an uptick in residential and commercial installations, distributed solar PV is playing an increasingly important role, reducing reliance on centralized power generation and supporting local grids.

3. Regulatory Landscape

The regulatory environment in the U.S. is a key factor in shaping solar PV market growth. Federal and state-level policies, tax credits, and renewable portfolio standards (RPS) have been instrumental in driving solar adoption.

Key Regulatory Drivers:

• Federal Tax Incentives: The Investment Tax Credit (ITC), which offers a tax credit for solar installation costs, has been a primary driver of growth. Extended under recent legislation, the ITC continues to incentivize new solar projects, particularly large-scale installations.
• State-Level Policies and RPS: Many states have set aggressive renewable portfolio standards requiring a certain percentage of electricity to come from renewable sources, with solar carve-outs in certain cases. States like California, Texas, and Florida lead in installed capacity due to favorable policies and incentives.
• Net Metering Policies: Net metering, which allows consumers to sell excess power back to the grid, is critical for residential and commercial solar adoption. However, evolving net metering policies are affecting installation economics in certain states, with debates around fair compensation for solar energy.
• Federal and State Grants and Loans: Government programs, such as the U.S. Department of Energy’s loan guarantees, provide funding and support for large solar projects, facilitating faster growth in the sector.

4. Key Players in the U.S. Solar PV Market

The U.S. solar PV market comprises numerous players across the solar value chain, including solar panel manufacturers, developers, and installers.

Major Solar PV Companies:

• First Solar: An American manufacturer specializing in thin-film solar technology, First Solar is a key supplier for utility-scale projects, with a strong commitment to U.S.-based manufacturing.
• SunPower Corporation: A prominent residential and commercial solar provider, SunPower is known for its high-efficiency solar panels and integrated solar solutions.
• Tesla Solar (formerly SolarCity): Tesla’s solar division provides solar panels, solar roofs, and energy storage solutions for residential customers, advancing the adoption of distributed solar energy.
• NextEra Energy Resources: As one of the largest renewable energy developers, NextEra Energy has a significant stake in utility-scale solar projects across the U.S.
• Enphase Energy: A leader in microinverter technology, Enphase supports the residential and commercial markets with solutions for maximizing solar power generation and integrating storage.

5. Forecast to 2035

The U.S. solar PV market is expected to continue growing through 2035, driven by ongoing declines in solar costs, government incentives, and increasing demand for renewable energy. The market outlook anticipates significant growth in both utility-scale and distributed solar installations, with new technology supporting more efficient and cost-effective solar power generation.

Growth Drivers:

• Technological Advancements: Developments in solar cell efficiency, bifacial panels, and tracking systems are expected to increase output and reduce costs.
• Expansion of Utility-Scale Solar: Utility-scale solar will remain a dominant force, with state renewable mandates and corporate power purchase agreements (PPAs) contributing to growth.
• Battery Storage Integration: The addition of energy storage solutions is key to overcoming solar power’s intermittency and aligning solar output with peak demand periods.
• Federal and State Incentives: With renewed federal support and tax credits extended through recent policy initiatives, the economic viability of solar PV will continue improving.
• Corporate Demand for Clean Energy: Corporations are increasingly investing in solar power to meet ESG goals, leading to an increase in solar adoption via PPAs and direct installation of solar assets.

Potential Challenges:

• Policy and Regulatory Uncertainty: Future changes to policies like net metering or the ITC could impact market growth.
• Supply Chain Constraints: Dependence on imported solar components, particularly from Asia, could affect availability and pricing.
• Land and Grid Infrastructure: As utility-scale solar expands, land availability and grid integration challenges could limit project locations and require substantial investment in transmission infrastructure.

Conclusion

The U.S. solar PV market stands as a cornerstone of the nation's renewable energy transition. Strong policy support, declining costs, and an increasing focus on sustainability and corporate ESG commitments are driving rapid growth. Through continued advancements in technology and improvements in grid integration, solar PV is poised to meet a substantial portion of the nation’s energy needs.