US solar industry marks 5 million projects, eyes 10 million by 2030

It took half a century to install 5 million solar projects in the US. Now the industry believes that it can repeat that feat in just six years.

"Solar is scaling by the millions because it consistently delivers on its promise to lower electricity costs, boost community resilience, and create economic opportunities," Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said in a May 16 statement accompanying the release of new data from SEIA and research firm Wood Mackenzie.

Home solar arrays account for 97% of the 5 million projects, a milestone that SEIA estimated was surpassed in the first quarter. More than a quarter of America's solar fleet has come online since the August 2022 passage of President Joe Biden's climate and energy law, the Inflation Reduction Act, the industry group said, with over half installed since 2020.

Despite some economic and state policy challenges — especially in California, the largest US rooftop solar market — SEIA forecast the number of solar installations around the country will double to 10 million by 2030 and triple to 15 million by 2034.

"It just seems like we continue to accelerate," Michael Grasso, chief revenue officer at rooftop solar company Sunnova Energy International Inc., said in an interview. "The achievement is pretty spectacular, and I do look forward to the next five to 10 years."

Grasso attributed the rise of solar partly to technological advances, including the addition of battery storage to many projects. In 2023, 13% of residential installations included battery storage systems, according to SEIA, which anticipates that share rising to 26% by 2028.

In addition, companies have adapted their business models, Grasso said, with Sunnova and other leading distributed solar suppliers offering leases and power purchase agreements, helping the industry to expand the overall market and ride through a period when high interest rates are affecting purchases with loans.

The Sunnova executive also cited utility bill inflation as a major demand driver for rooftop solar.

"What we will continue to see is greater acceptance of residential rooftop solar," he said. "As utility prices continue to increase across the country ... it opens up an opportunity for solar to be that much more competitive [with] the local utility."

Entering 2024, cumulative installed US solar capacity totaled 177 GWdc, driven largely by utility-scale photovoltaic (PV) projects, following a record 32.4 GWdc added in 2023, according to SEIA and Wood Mackenzie. Solar has been the leading source of annual US generating capacity additions for the last five years, they estimate.

The US Energy Information Administration expects solar to lead US net generating capacity additions in 2024 and 2025 as well, not including rooftop solar and other projects under 1 MW.

'A lot of transition' for rooftop solar

Analysts at S&P Global Commodity Insights forecast the US will add 36.5 GWac of PV in 2024, up from 30 GWac in 2023, fueled by strong growth in utility-scale projects. Residential PV additions, however, are forecast to decline to roughly 4 GWac this year from 4.5 GWac in 2023.

Grasso expects the residential segment to see "flat to slightly negative growth" in 2024. "I would expect that to swing back next year to a positive growth year."

Commodity Insights analysts also foresee a return to growth in 2025.

"There's just been a lot of transition in the industry," Grasso said. Some competition has "moved to the sidelines" because of the impact of higher interest rates, he added.

SunPower Corp., a pioneer in California's rooftop solar industry, said April that it was winding down its residential installation business, halting direct sales and laying off 1,000 workers to "achieve financial viability."

On top of interest-rate challenges, distributed solar installers and equipment suppliers have been struggling to adapt to California's sweeping rooftop PV reform that went into effect in April 2023. The new rules aggressively lowered payments for excess solar sent back to the grid under net energy metering and implemented a tariff structure with significantly lower export rates that encouraged batteries on new projects.

"We're starting to see a pickup in growth in California," Grasso said, noting that many dealers were working through backlogs of projects under the prior rules and had to adjust to selling batteries with PV arrays. "We're bullish on it."