US Solar Market Insight

Solar Power Industry in the US - Revenue, Market trends and Growth Projections

Key Details

• The US solar industry has seen an average yearly growth of 33% across ten years (2011 to 2021)
• While California has historically been the dominating state, Texas, Florida, and New York experienced considerable growth in 2022.
• As of 2021, there are over 255,000 Americans employed by 10,000 solar businesses across the nation.
• 29.6% of workers in the solar industry were women in 2021, marking a 35% increase from 22% in 2014.
• Solar photovoltaic (PV) systems accounted for half of all new energy-generating capacity.

How Big is the Solar Market in the US?

The US solar market comprises all 50 states and Washington D.C. As of 2023, an estimated total of 4,034,327 solar energy systems have been installed in these states.

According to the U.S. Energy and Employment Report 2022, solar employment opportunities are on the rise in 47 U.S. states, buoyed by an increase in consumer, commercial, and utility demand.

The solar industry employs more than 333,887 Americans, marking a 9.2% increase or 17,212 additional positions compared to the previous year. These individuals are employed by the over 10,000 businesses located in each US state.

Further sector analysis of solar employees in the United States revealed that 168,960 worked as installers and developers, while 33,099 worked in manufacturing.

Sales and Distribution and Operations and Maintenance accounted for 28,978 and 12,530 employees, respectively. The remaining 11,471 employees were distributed among various solar-related occupations.

The U.S. solar industry has historically been dominated by California, but other markets are still growing quickly. Texas, Florida, and New York, for example, all experienced significant increases by 2022. Additionally, compared to just three states a decade ago, half of the American states now have solar installations of 1 GW or more.

The figures above indicate that installation companies are driving the expansion of the solar industry. This is due to the fact that the installation and project development industry has experienced the most remarkable growth over the past decade. Since 2011, the number of employment opportunities in this sector has more than tripled.

According to the U.S. Department of Energy, the United States added 20,2 gigawatts (GW) of solar energy capacity in 2022, bringing its total installed capacity to 142.3 GW. This solar capacity is sufficient to power 25 million households in the United States.

Gender Diversity

According to the IREC's National Solar Jobs Census, only 29.6% of the solar workforce in 2021 were women. While this is less than the 47% of women in the overall US workforce, it is still a substantial increase since 2014, when it was just 22%.

Since 2014, when the first Solar Jobs Census report analyzing employee demographics was published, the proportion of women in the solar workforce has increased by almost 35%.

There is a pay gap for women in the solar industry, just like in other sectors. Men are more likely to earn higher wages than women at all employment levels. This situation resulted in a 26% gender wage disparity in the solar industry.

Only 28% of women are paid between $31 and $74 per hour, compared to 37% of males. In addition, the median wage for males was $29.19, but only $21.62 for women.

According to the 2019 Solar Industry Diversity Study, women are less likely to report effectively moving up the job ladder in the solar industry. The study revealed that men are more likely to be satisfied with their wages and position.

This finding was supported by nearly 40% of the men who said they were "very satisfied." In contrast, only 26% of women claimed to be "very satisfied" with their salary and job position.

The existing gender disparities are also emphasized by the fact that only 28% of women in the solar business occupy manager, director, or president-level positions. These disparities are even more pronounced for women of color.

According to McKinsey & Company's 2020 Women in the Workplace report, white women in corporate America occupy 23% of senior vice president roles and 19% of c-suite roles, compared to 5% and 3% for women of color.

US Solar Industry Projected to Increase Five-Folds Over the Next Decade

According to the SEIA Solar Market Report 2022, cumulative solar installations will surpass 700 GWdc by 2033, compared to 141 GWdc installed by the end of 2022. In other words, by 2033, the total installed solar capacity will be five times larger than the 2022 levels.

Until 2027, the average rate of growth is projected to be 19%. From 2028 to 2033, it is expected that the average annual development rate will decrease to 7%. As market penetration increases and grid capacity decreases, growth diminishes.

Solar Power: Industry Growth

The US solar industry has experienced an average yearly growth of 33% over the past ten years. As of March 2023, there are more than 140 gigawatts (GW) of installed solar capacity nationwide. This capacity is enough to power 25 million homes.

Wood Mackenzie Power & Renewables and the SEIA established essential figures that highlight the significant trends and expansion in the U.S. solar market for their Solar Market Insight Report 2020 Year in Review.

According to the study, by 2030, the proportion of homes with solar installations will have more than tripled, rising from 4% in 2020 to 13.4%.

The report, which was published in March 2021, shows that:

• In 2020, the solar market produced a total of 19.2 GWdc of solar capacity. This figure was up 43% from 2019.
• For the second year straight, solar generated the most power of any generating technology.
• 43% of the additional generating capacity added in 2020 was from solar.
• More than 8 GWdc of solar PV was installed in the fourth quarter of 2020. This was an increase of 32% from the same period in 2019.
• Residential installations reached a record high of 3.1 GW in 2020, up 11% from 2019. However, this was lower than the yearly growth rate of 18% in 2019—likely due to the pandemic.
• The geographic variety also increased, with 27 states adding more than 100 MWdc each.

2022 recorded key changes, driven in part by the anticircumvention probe, equipment detainments by Customs and Border Protection (CBP), and the passage of the historic Inflation Reduction Act (IRA).

Industrial, municipal, and utility-scale solar all saw annual decreases relative to 2021. The fourth quarter of 2022 was the greatest for utility-scale installations, with 4.3 GWdc installed.

However, this was still the utility-scale segment's weakest fourth quarter since 2018. The last time utility solar contracted by 31% was in 2017. That was when the industry anticipated the end of the investment tax credit.

In contrast to the other sectors, the residential sector increased by 40% between 2020 and 2021, the highest annual growth rate since 2015. Since roughly half of the residential solar market uses panels made in the United States, this industry has been less vulnerable to the effects of trade disputes. By the end of 2022, solar panels had been installed in 6% of single-family, owner-occupied houses.

In 2022, solar photovoltaic (PV) was again the leading technology for adding new energy-generating capacity. Such solar systems accounted for half of all such additions for the fourth year in a row.

Residential Solar Market Growth

In 2021, the residential solar market set a new high water mark for the 6th year running. With 5.9 GW of capacity installed, the industry witnessed a 40% growth from 2021 levels.

Rising household energy expenses due to the pandemic, power outages, and cheap financing continue to motivate customers.

However, proposed changes to Net Metering regulations in a number of states could slow that expansion. For instance, future reductions in California are anticipated to be substantial thanks to NEM 3.0.

By 2023, the California market will still be expanding thanks to projects signed under the current Net Metering regulations, but by 2024, the residential market is expected to shrink by nearly 40%.

Between 2020 and 2030, the solar photovoltaic (PV) industry in California is expected to expand at a rapid pace. This is because of the federal policies that have contributed to its explosive expansion, such as the increasing demand for green energy in both the public and private sectors and the solar investment tax credit.

In 2021, the solar business in the United States attracted private investment of USD 33 billion, as reported by the Solar Energy Industries Association.

California's leadership in the residential solar PV industry in the United States can be attributed in large part to the state's supportive policies and regulations, such as net metering for solar PV.

The residential solar PV industry has been bolstered by the availability of a number of incentives for residential end users to set up solar PV systems.

Expansion of Solar Photovoltaics

Deployment levels for solar systems dropped to their lowest point since 2019 in 2022 as a direct consequence of pricing and procurement issues. The solar industry is expected to recover once stable supply is restored sometime in the second half of 2023.

As a result of the Inflation Reduction Act, the market should expand at a rate never seen before. More solar power capacity will be installed in the next five years than has been put in the previous twenty. The law will hasten the shift to renewable energy by providing crucial tax incentives and long-term certainty for the solar and storage industries.

Rapid Increase in Solar's Proportion of Newly Generated Capacity

For the years 2019, 2020, 2021, and 2022, the newest grid-connected electricity generation capability came from solar. In 2022, solar contributed the highest-ever percentage of additional electric capacity to the grid, at 50%. As solar becomes more cost-competitive, its portion of U.S. electrical generation has increased rapidly, from 0.1% in 2010 to nearly 5% in 2023.

The 2020 Wood Makenzie and SEIA report identified the following states as among the fastest-growing and/or emerging solar states:

• South Carolina, which had 1,160 installations in 2016, is projected to reach 18,000 solar installations in 2019 and 22,000 installations by 2024.
• Together, Texas, Utah, Florida, Maryland, and Rhode Island have increased from 50,000 to over 200,000 installations.
• Illinois is expected to increase its solar system installations from approximately 4,000 to 100,000 by 2024.

Rapid Expansion of Community Solar Is Fueled by New States

Although the initial expansion of community solar installations was led largely by three key markets — New York, Minnesota, and Massachusetts — this is no longer the case. A growing number of states with community solar programs have helped diversify the market. These solar farm projects are projected to be completed over the next couple of years. To make solar energy available to all kinds of households and businesses, states must continue to expand their community solar programs and enhance their interconnection protocols.

Storage is increasingly combined with all solar technologies

Increasingly, homeowners and companies are requesting solar systems with battery storage. Although this coupling is still fairly new, substantial expansion is projected over the next five years. By 2025, nearly one-fourth of the newly installed behind-the-meter solar systems will include storage, up from less than 8% in 2021. Furthermore, the utility-scale market has begun to recognize the benefits of combining solar with storage, with over 45 GW of commissioned or announced projects combining solar with storage, corresponding to over 50 GWh of storage capacity.

Biggest Solar States in the US

California

California has the highest installed capacity of solar photovoltaic (PV) energy of any state in the United States. California's cumulative solar power capacity in 2022 was 39,729 Megawatts, sufficient enough to power 10,748,338 households.

Solar power energy accounts for 27.34% of the state's total electricity production. As of 2022, California has accumulated $88.3 billion in solar investments. The state's solar energy forecasts indicate that California will add 26,569 Megawatts by 2028.

Texas

With 17,247 Megawatts of installed solar energy output as of 2022, Texas became the second-largest solar energy producer. This is equivalent to 1,957,307 households' worth of solar power and accounts for 4.81% of the state's solar-powered electricity.

With more than 4 GW of capacity anticipated to be added over the next five years in Texas, the state is well-positioned to become a national leader in solar energy thanks to effective state policy that lowers barriers to the market and acknowledges solar's advantages.

Florida

In 2023, Florida was the third biggest solar state in terms of installed solar capacity, with a total of 10,111 megawatts, enough to power up to 1,195,212 homes. The Sunshine State generates 5.3% of its electricity from solar power.

The sum of $3.1 billion was invested in Florida's solar industry in 2022, out of a total market worth of $14.3 billion.

North Carolina

In 2022, North Carolina recorded 8,179 MW of installed solar power, with 294 MW added in the year itself. There are currently enough solar panels installed across the state to power 949,781 homes.

8.92% of the state's energy comes from solar power. North Carolina's solar industry is worth $11.1 billion as of 2022, with $543 million expected to be invested that year. The state is expected to add 1,786 MW of solar capacity by 2028.

The state's Renewable Energy and Energy Efficiency Portfolio Standard (REPS), combined with a strong policy and regulatory support, has contributed to the rapid expansion of North Carolina's solar sector. As a pioneer in large-scale solar power, the Tar Heel State has a promising solar future.

North Carolina's solar industry received a significant boost in 2017 when a law was passed that legalized solar leasing, allowing homeowners who opt to go solar more flexibility in how they manage their energy costs.

Arizona

In terms of total installed solar power, Arizona ranks in the top five. The state's solar market is worth $16.1 billion, and its entire solar capacity of 6,330 MW can provide enough electricity for 974,221 homes. In 2022 alone, investments totaling $1.5 billion were projected to be made in solar power systems.

Included in the top 10 largest photovoltaic states in the United States are Nevada, Georgia, New Jersey, Virginia, and New York. The following table provides a summary of these states' solar energy profiles.

US Solar Employment

As of 2023, there are 255,037 solar energy-related jobs in the United States. These employment opportunities consist of jobs in installation and project development, manufacturing, wholesale trade and distribution, operations and maintenance, and others.

Employment Breakdown by Sector

An analysis of employment by sectors revealed that almost 77% of all jobs in the solar business in 2021 were in demand-side sectors (installation, project development, and wholesale/distribution).

Only 13% of solar employment in the United States was in manufacturing, with the remaining 10% split in half between operations and maintenance and "other '' solar jobs.

Between 2020 and 2021, most of the increase in employment was attributable to the installation and project development subsector. More than 14,000 new jobs were created in the sector, bringing the total number of employees to 168,960, an increase of 9.3%.

Meanwhile, employment in the wholesale and retail trade increased by nearly 3,300, employment in the "other" area increased by nearly 1,400, and employment in manufacturing increased by slightly more than 2,000.

Finally, O&M grew at the fastest pace of any industry (24.3%), adding slightly more than 2,400 positions. O&M workers will be in higher demand as solar continues its record pace of deployment.

Solar Job Market by Sector'

Employment Breakdown by Installation SubSector

Listed below are the different types of markets that the Solar Jobs Census 2021 divides the installation and project development industry into residential, commercial, community solar, and utility-scale.

In terms of solar capacity, the utility scale is by far the biggest section (64% of the total),. However, it has fewer employees in installation and project development than the other two segments.

The reason for this is the lower transaction costs per unit of capacity employed in the utility-scale sector, which allows for greater economies of scale and higher labor efficiency.

Just over half of all employment is in the residential sector (85,305), which is more labor-intensive. With 34,329 and 33,808 employment, respectively, commercial and utility-scale installation and development account for roughly 20% each of the total.

About 9% (15,517 jobs) of solar installation employment were for community solar projects. Employment in the solar industry is compared on a category-by-category basis in the National Solar Jobs Census.

Solar employment by industry is based on the main business category of the companies investigated, while occupational category data details specific job functions.

While companies whose primary business is installation and project development account for 66% of solar employment, only 37% of their employees actually perform installation and repair tasks.

Also, while 7.7% of all jobs are held by people in manufacturing professions, 13% of solar workers are employed in the manufacturing sector. (and a third of those in manufacturing).

Many different types of businesses employ people with manufacturing and production job titles, such as assemblers, makers, welders, cutters, solderers, and machinists. In addition, some workers in a manufacturing company may be engaged in sales, administration, or other functions.

Employment Breakdown by State

While the solar industry is expanding rapidly across the country, many employment opportunities are clustered in specific regions. As of 2021, California had the most jobs (75,712), followed by Florida (11,761), Massachusetts (10,548 jobs), New York (10,524 jobs), and Texas (10,346 jobs).

After those states, with 7,000 to 9,000 employment, come Arizona, Colorado, Ohio, and Nevada. The solar industry added employment in 47 states in 2021.

There were 7,035 new employments in California, 1,053 in Massachusetts, 1,019 in Nevada, and 9,32 in Arizona. Following closely behind with between 800 and 900 new jobs each are the states of Ohio, North Carolina, New Jersey, and Georgia (see chart below).

Although Alabama saw the greatest percentage increase in employment (43%), other states, such as Georgia, also saw sizable gains. Nebraska, North Dakota, Idaho, West Virginia, Kentucky, and Montana are among a group of states with modest but expanding photovoltaic markets.

Further analysis of the proportion of solar employment growth in the top 10 states revealed that Nevada was the only state to register a 15% to 25% increase in solar jobs during the period under review.

Nevada's employment grew by 16.5% between 2020 and 2021. Texas (2.6%), New York (3.1%), Florida (4.8%), and Colorado (9.0%) are examples of U.S. states with employment growth between 0% and 10%.

Half of the top 10 states experienced solar job growth between 10% and 15%. California (10.25%), Massachusetts (11.1%), Arizona (12.7%), Ohio (13.5%), and North Carolina (14.3%) are among these states. No state experienced job growth of 20% to 25%.

Top 10 States Based on Solar Job Growth

What are the Education Requirements for Entry-Level Solar Positions in the US?

For workers without a two- or four-year college degree, the solar industry can offer a route to rapid career advancement. This is because less than 20% of entry-level solar jobs require prior expertise or training, and only 31% of these jobs require a bachelor's degree.

Many employers are willing to hire entry-level workers with a strong work ethic who are ready to learn on the job, especially in a tight labor market.

Even though they are not always necessary, solar training programs can aid job applicants at the entry-level in building their fundamental skills and credentials.

In many markets and increasingly in the virtual learning environment, courses that are in line with national skills standards and emphasize hands-on training are accessible for entry-level jobs. Community colleges, trade associations, technical and vocational schools, private training companies, and other places provide training classes.

Although they are typically not necessary for entry-level positions, professional credentials like the North American Board of Certified Energy Practitioners (NABCEP) certification can be beneficial for career progression.

In order to match the curriculum with industry requirements, solar employers have expressed a greater interest in direct training collaborations with educational institutions.

In 2021, 37% of the jobs filled by solar firms needed a bachelor's degree or higher, and 65% of all recruits (both entry-level and non-entry-level) needed prior experience.

Manufacturing had the highest proportion of new employees needing experience (78%), while the highest percentage needing a bachelor's degree or higher (77%) was in the operations and maintenance sector.

Percentage of Solar Firms Requiring Experience and Education for New Hires, 2021

Many positions in the solar industry don't require industry credentials, especially at the entry-level. To install solar, though, you may need an electrical license or a license from another state.

These requirements are listed by state and differ considerably on the IREC Solar Licensing Database.

According to the Solar Jobs Census Report 2021, 29% of solar installers nationwide are licensed as electricians, 13% are licensed specifically for solar work, and 14% have a solar-specific qualification like the NABCEP. However, almost half (44%) of those who put solar panels lack a license.