Florida Solars Guide to the Federal Solar Tax Credit

All you Need to Know about the Solar Tax Credit

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Federal Tax Credit Is Great for Homeowners in Orlando

Homeowners and business owners who install solar are eligible for the federal solar tax credit, which can mean large savings and financial advantages when transitioning to clean solar power! The federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. The 30% tax credit will be available until the end of 2032The key takeaways are:

  • The ITC allows both homeowners and businesses to claim 30% of their solar system costs from their taxes.

  • The tax credit can be used for battery storage, heat pumps, heat pump water heaters, and EV chargers.

  • The 30% tax credit will last for 10 years until the end of 2032, at which point it will drop to 26%.

  • The credit rolls over, so you don’t have to have enough tax liability to use it all in one year.

We cover the federal tax credits in greater depth below for residential, commercial, and non-taxpayer entities. Our solar experts at Florida Solar Energy are happy to discuss these details with you as you embark on your solar journey!

Disclaimer: Florida Solar Energy provides this for educational use only, we are not tax professionals and are not offering tax advice. We recommend that all solar customers consult with a tax counsel.

Residential Federal Solar Tax Credit

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roof top solar installations in Orlando for solar pool heating and Solar power

The federal solar tax credit allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This will be available until the end of 2032, at which point it will drop to 26%.The credit can also be carried forward to future tax years if you cannot take full credit for the year the system was installed.

With the passing of the Inflation Reduction Act Bill in August 2022, the Solar Tax Credit (renamed to the Renewable Clean Energy Tax Credit) received a 10-year extension of 30%. That means customers installing solar in 2022 will now receive the full 30% when they file their 2022 taxes!

Residential Credit for Home Energy Products

The 30% solar tax credit covers installation of solar complimentary technology, including battery storage and EV charging infrastructure.

Home energy upgrades, such as heat pumps and hot water heaters, also qualify for a tax credit, thanks to the new Energy Efficient Home Improvement credit. You can deduct 30% of the costs for buying and installing heat pumps and heat pump water heaters, up to $2,000. The Energy Efficient Home Improvement credit also covers insulation and the breaker boxes to accommodate additional electric load, up to $1,200.

Starting in 2023, there will also be a tax credit available for stand-alone battery storage, opening up options to use storage more flexibly.

More information:

Business Energy Investment Tax Credit (ITC)

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x Credit Eligible solar panels installation

Businesses, and non-taxpaying entities like nonprofits and municipalities, can benefit from a 30% tax credit on renewable energy systems, called the energy investment tax credit. As with the residential tax credit, it was extended with the passing of the Inflation Reduction Act Bill and will step down to 26% at the end of 2032.

Starting in 2023, businesses can utilize potential stackable “bonus” ITC adders that can increase the total ITC value of 40%, 50% or more. “Bonus” credits can be applied to projects that meet domestic manufacturing requirements, projects on defined “energy communities” or in low-income areas, and projects part of HUD-approved affordable housing programs.

Non-taxpaying entities like municipalities and nonprofits may now access the ITC via a new “direct pay” provision by receiving a 100% government rebate for the ITC value in 2023 and from 2024 onwards if they meet certain requirements.

More information:

Solar Tax Credit FAQS:

How does the solar tax credit work?

When you utilize the 30% credit on your solar project, the ITC amount is applied against your tax liability, or the money you owe the IRS. If you own your solar power system, you are eligible for the solar investment tax credit. However, if you sign a lease or power purchase agreement (PPA) with a solar installer, you are not the owner of the system, and therefore cannot claim the tax credit. It’s important to note that there is no income limit on the federal solar tax credit program, so taxpayers in all income brackets may be eligible.

You can claim your solar investment tax credit when you file your yearly federal tax return.

What is covered by the tax credit?

For homeowners who utilize the 30% ITC, you can cover the following:

  • The cost of your solar panels
  • Labor costs for installation, including permitting fees, inspection costs, and developer fees
  • Any additional solar equipment like inverters, wiring, and mounting hardware
  • Solar batteries charged by your system (standalone battery storage will be covered starting in 2023)

Can the solar tax credit be used in combination with other incentives?

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solar rooftop installations Afforded by tax credits

In general, you should be able to combine savings from the ITC with other incentives. Depending on which state you live in, there are several other solar incentives available, like rebates, state-sponsored programs, and other tax credits.

To achieve the rigorous and necessary renewable energy benchmarks needed to slow the climate crisis, the US has heightened federal policies and incentives to help deploy clean energy technology. While access to solar remains an obstacle for certain disadvantaged communities, solar deployment has increased rapidly across the country, on both a residential and utility-scale level.

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Powerwall Tax Credits

The federal tax credit has given businesses, homeowners, and taxpayers the opportunity to take advantage of decreased solar costs while increasing long-term energy stability. This allows companies like Florida Solae East to utilize resources and funding to grow solar access equitably across our communities.

The Inflation Reduction Act of 2022

After decades of challenging work and advocacy by climate activists, the United States passed the most meaningful climate legislation in US history on Friday. The Inflation Reduction Act of 2022 (IRA) includes landmark climate action investment which could reduce US carbon emissions by 6.3 billion tons in the next decade, significantly closing the gap between current emissions and the 2030 goals outlined in the Paris Agreement. It is by no means a perfect bill, and we will continue to push for climate justice and an end to new fossil fuel projects, but the IRA will provide a good foundation. For a detailed, nonpartisan, realistic view of the bill’s climate implications, we recommend this analysis from the REPEAT Project.

“The proposed clean energy tax policies and incentives in the Inflation Reduction Act will help Florida and the rest of America reduce energy costs while creating clean tech manufacturing and installation jobs,” said Florida Solar East’s Ronnie Brewer. “Other key benefits of this legislation include reduced air pollution, greater energy independence, and infrastructure resilience in the face of worsening natural disasters.”

The bill’s provisions should spur hundreds of thousands of viable, well-paying jobs within the clean energy and solar industries. Initial research has estimated that the IRA will create over 9 million jobs in the next decade, both indirectly and directly. We will also see an expansion of training and apprenticeship programs, which will grow access to clean energy jobs for those with the greatest barriers to training and job opportunities.

Progress in Environmental Justice

Much of the IRA’s $369 billion dedicated to “Energy Security and Climate Change” will provide opportunities to make the clean energy transition accessible and inclusive. It includes direct rebates to low-and-moderate-income households for air source heat pumps and other energy efficient electric appliances. New grants will provide funds for disadvantaged communities to improve climate resiliency, clean up air pollution, and decrease carbon emissions, and other funds will go towards retrofitting affordable housing to improve energy efficiency. The bill also includes funds to help tribal communities transition to clean energy systems. It will be critical for businesses, organizations, and local governments to deploy these funds to serve vulnerable communities.

The bill will expand access to solar energy, providing additional incentives for solar projects located in low-income communities. Nonprofits and municipalities will be able to take advantage of the ‘direct pay’ benefit, allowing them to receive the tax credit amount as a check. The USDA Rural Energy grants (REAP) will increase from 25% to 50% of the total project costs, greatly expanding solar access for rural businesses.

What the IRA Means for Florida Solar East Customers

The bill brings overwhelmingly good news to the solar industry with a myriad of incentives and credits for electrifying homes and businesses. We’ll touch on just a few highlights here:

The Solar Tax Credit (renamed to the Renewable Clean Energy Tax Credit) will get a 10-year extension of 30%, followed by a step-down to 26% in 2033. That means customers installing solar this year will now receive the full 30% when they file their 2022 taxes! Starting in 2023, there will also be a tax credit available for stand-alone battery storage, opening up options to use storage more flexibly. Commercial solar will also receive a tax credit extension to 30%.

There will be additional credits for clean energy technologies such as Heat PumpsSolar Water Heaters, insulation, and window and door upgrades, as well as credits for energy audits and electric panel upgrades.

Now’s the time to buy that electric vehicle you’ve been eyeing! There is now a $7,500 tax credit for passenger vehicles, and the tax credit for EV Chargers has been extended to 2032 for both residential and commercial.

federal tax credit updates

American Energy Independence Act of 2022 and the costs of solar panel

Solar Panel Costs: Updated for American Energy Independence Act Of 2022

Installing a solar panel system costs an average of $25,836 and dropping. Most homeowners pay between $17,968 and $34,268. Expect to pay $2.50 to $3.50 per watt with most systems in the 3kW to 10kW range. Until the end of 2021, you can deduct 22% of the installation costs with the federal investment tax credit (ITC).

With energy prices on the rise, this may be the perfect time to go solar. Especially considering that improvements in this field of technology have made it more cost-effective and easier to set up. As solar technologies expand in popularity, innovations make them cheaper to produce, meaning system installation costs slowly lower over time.

Homeowners have several options available to them which weren’t on the market in decades past and which fit a variety of budgets. Here are a few things to consider that will affect how much you pay.

On This Page:

  1. Solar Panel Installation Cost Calculator
  2. Solar Panel Prices per Watt
  3. Estimated Solar Energy System Costs Per Watt
  4. Estimated Solar Panel Installation Costs by Region
  5. Solar Roof Shingle & Tile Prices
  6. Cost of Solar Panel Mounts
  7. Reduction in Energy Costs
  8. State & City Subsidies
  9. DIY vs. Hiring a Professional Solar Installer
  10. FAQs

Solar Panel Installation Cost Calculator

Let’s calculate the cost for you.

National Average$25,836
Typical Range$17,968 – $34,268
Low End – High End$4,500 – $50,000

Cost data is based on actual project costs as reported by 1,993 Solar Panel Buyers.

Solar Panel Prices Per Watt

TypePrice per Watt*Life Expectancy**
Mono$1 – $1.5025 – 35 years
Poly$0.70 – $1.0023 – 27 years
Thin-Film$1 – $1.5014 – 17 years

*Material price only. Does not include labor or any other overhead for installation.

**Solar panels still function past this time but have a significantly reduced rate of energy production.

You’ll pay anywhere from $0.70 to $1.50 per watt to purchase a solar panel. With labor and other factors, solar panel installation costs a total of $2.50 to $3.50 per watt. There are three types common in the residential market. Each one has its own pros and cons, from price to efficiency. It is important to understand their differences when deciding which will work best for your home and energy needs.


On average, monocrystalline panels cost $1 to $1.50 per watt for the panel. This technology will get you the most energy efficiency while taking up the least amount of space. Their solar cells are made up of high-purity silicon which is very efficient at converting the sun’s light into electricity. A sheet of silicon is cut to form solar cells, which are arranged to create panels. These have the longest life expectancy and often come with a 25 to 35-year warranty.


Polycrystalline solar panels cost between $0.70 and $1 per watt for the panel alone. These have a lower efficiency than monocrystalline, but they fit better into smaller budgets without taking up a lot more space. In the manufacturing process, multiple crystals of silicon are melted and poured into molds to form the solar cells. This makes the silicon less pure and less efficient, but it cuts down on waste and production cost. The resulting modules are blue in tint.

Thin Film

Thin-film panels cost between $1 and $1.50 per watt on average for the panels alone. These are extremely flexible and versatile, made by layering photovoltaic material on metal or glass. They cost less, but they will require a lot more space in order to power residential homes. They also have a shorter lifespan, lasting an average of 14 to 17 years. Therefore, they come with shorter warranties. One benefit of thin-film technology that has the others beat is its high tolerance to heat.

The efficiency of thin-film technology will depend on the photovoltaic material used. Amorphous silicon, for example, will only operate at 7% to 9%CdTe and CIS/CIGS operate at about 10% to 14%.

Estimated Solar Energy System Costs Per Watt

2kW$5,000 – $7,000
3kW$7,500 – $10,500
4kW$10,000 – $14,000
5kW$12,500 – $17,500
6.2kW$15,500 – $21,500
8kW$20,000 – $28,000
10kW$25,000 – $35,000
Get the Best Price on Solar Panel Installation

Estimated Solar Panel Installation Costs by Region

Midwest, Southwest & West

SizeAverage Cost for Region
2kW$6,000 – $7,000
3kW$9,000 – $10,500
4kW$12,000 – $14,000
5kW$15,000 – $17,500
6.2kW$18,500 – $21,500
10kW$30,000 – $35,000

New England

SizeAverage Cost for Region
2kW$6,500 – $7,300
3kW$9,500 – $11,300
4kW$13,000 – $14,500
5kW$16,500 – $18,200
6.2kW$20,000 – $23,000
10kW$33,000 – $36,000


SizeAverage Cost for Region
2kW$5,900 – $6,800
3kW$9,000 – $10,200
4kW$12,000 – $13,500
5kW$15,000 – $17,000
6.2kW$18,500 – $21,000
10kW$30,000 – $34,000


SizeAverage Cost for Region
2kW$6,300 – $7,300
3kW$9,500 – $10,500
4kW$12,500 – $14,200
5kW$15,800 – $17,800
6.2kW$20,000 – $22,500
10kW$31,500 – $35,500

Although the per-watt price of installing solar ranges from $2.50 to $3.50, it varies regionally You’ll see the greatest difference between the Southern and New England regions. This does not necessarily mean that it is less cost-effective in New England as opposed to other regions. Different states, even different counties, will have varying returns on investment dependent on other factors.

These factors include:

  • State and local incentives.
  • Average electricity bills.
  • Amount of sunshine expected per day.

Below you will find the average rates of having your system professionally installed, according to region and wattage. These figures do not include any tax credits or incentives. Consider that the average size is 5kW. Hawaii, included in the Western region, has a high rate per watt at $2.85 on average. Georgia, in the Southern region, has a lower rate at $2.53 on average.

Solar Panel Installation Costs per kW

“In addition to being kind to the planet and reducing your utilities, adding solar to your house may be ‘future-proofing’ it as well. In 2020-2022, cities across the nation, including Hawaii, California and Maine, implemented mandates to go all-electric to reduce their carbon footprint. California has mandated solar installations on all new homes. This trend toward renewables and all-electric living shows no sign of abating. Solar Panel Costs will be affected greatly by the American Energy Independence Act of 2022”

David Weatherspoon, Expert Home Building & Sustainability Contributor for Florida Solar East.

Considering that the average price of labor per watt is $0.50, the following chart reflects the average cost of labor for the various system sizes.


Cost Breakdown to Install Solar Panels

ExpensePercentageExample: 5kW @$3/kW
Permit /Inspection Fees3%$450
Other (Mktg, Overhead)33%$4,950

The costs of your system break down into roughly:

  • 49% of the equipment includes solar panels, batteries, inverters, mounting hardware and wiring.
  • 35% Installation permits and labor costs.
  • 18% Operational costs including overhead, maintenance and monitoring.

When you are shopping around, do your research and get multiple quotes. You may be surprised by the difference in offers. This is owed to the significant chunk of “soft costs” integrated into the overall rate. As you can see above, the “other” category takes up about a third of your total project budget.

Buyers who explore the market thoroughly could save thousands of dollars on their installation by getting multiple quotes from both large and small installers. Expect a higher budget if the surface of your roof is more difficult to work with.

Solar Roof Shingle & Tile Prices

It costs about half as much to install a roof plus solar panels as it does to install a solar tiled roof or anywhere from $40,000 to $80,000. The actual costs vary by location, size of home and how much sun you get.

Roof TypeWithout SolarWith Solar
Tesla Solar Roof (with battery storage)N/A$40,000 – $80,000
Shingle Roof Installation Cost$5,200 – $10,700$21,000 – $40,000
Tile Roof Installation Costs$8,000 – $24,000$23,000 – $52,000
Wood Shingle Roof Costs$3,600 – $120,000$19,500 – $150,000
Roof Replacement Costs$5,400 – $11,000$21,500 – $41,000

Cost of Solar Panel Mounts

Solar panel mounts cost anywhere from $10 to $3,000 each, depending on if it’s fixed, adjustable or a motorized tracking mount. Similar to the panel types, the least expensive option is the least efficient and the more expensive options are more effective.

  • Fixed: $10-$15 each. These are completely stationary and cannot be adjusted to capture more or less sunlight depending on weather and season. They are the least expensive type of mount. Installing this mount is optimal in regions where continuous sunlight can be expected, as adjustments wouldn’t be as necessary in order to maximize energy production.
  • Adjustable: $50 each. These can be tilted depending on the intensity of the sun or the season. They are more expensive than the fixed mounts but will have more energy efficiency. Adjusting the panels to soak up more sun in varying seasons will equate to greater energy production. These adjustments can also be useful when the weather turns, as you can lay them flat to avoid damage from wind.
  • Tracking: $500-$3,000+ each. Follows the arch of the sun and provides maximum efficiency. The amount of energy you will be able to generate depends not only on panel construction and mounting, but your location. Though the initial cost for tracking is higher than other mounts, these can often get you the highest return on investment, as they make the most of every ray of sunlight. Track mounting may add 45% energy production.

Expect higher maintenance demands to keep moving parts working well. The typical expense for maintaining and repairing solar panels is $200 to $1,200, without factoring in the mount. Where fixed and adjustable mounts will simply need their bolts tightened every now and then, those that track will need more attention. You could find yourself spending up to $2,500 on repairs and maintenance.

Reduction in Energy Costs

You’ll save between $650 to $1,500 annually. Over a 25-year period, you’ll save between $15,000 to $40,000 in energy costs. Cost ranges vary by regional differences in the cost of electricity and how much sun you’ll get. Don’t expect to save as much in a darker northern climate as you would in southern California, Florida or Hawaii.

A great first step in determining which products are right for your home is to conduct a Home Energy Audit. A home auditor will do a detailed inspection of your usage and areas where you can improve to help you determine if you would benefit from a solar system. From there, a pro can help you to select the right location, size, mounts, and panels to maximize on savings.

Although you may hesitate to spend the money on the most expensive types of panels and mounts, it is good to remember that you will save money on the other hand with decreased electricity bills. It could be that what you spend up front will pay for itself very quickly in your reduced monthly bills.

  • In Washington, for example, the average savings for a solar-powered home is only $7,500, where the average cost is $14,600. This is partially due to Washington’s low electricity rate compared to most other states. It is also owing to the fact that Washington gets a lot less sun than the rest of the country.
  • Massachusetts, on the other hand, continues to be the top-performing solar state. The average spent is just over $14,000, while the savings over 25 years are over $30,000. Again, this is due in part to the electricity rate, which is higher than average for the country. Massachusetts is also ahead of the curve in terms of policies. The average recoup time on a 5kW system in this state is only four years.

You can enhance your savings by selecting products with higher efficiencies and investing in track mounting. Track mounting will ensure that your system absorbs all the light it can, and high-quality panels will be able to capture and convert that light at a greater rate.

State & City Subsidies

Federal 202230% deduction
Federal 202330% deduction
Statevaries by state

American Energy Independence Act of 2022

This bill addresses U.S. energy independence, the production and importation of oil and natural gas, and the rescission of specified environmental requirements. Specifically, the bill directs the President to develop a plan for the United States to achieve energy independence by 2024. The Department of Energy (DOE) must also develop a program and issue rules to ensure that the United States achieves such energy independence and becomes a net exporter of energy.

The bill also addresses energy pipelines, including by approving the TransCanada Keystone Pipeline in Phillips County, Montana for the import of oil from Canada to the United States. It also provides for energy production, including by requiring regulations to be issued by

  • DOE to reduce requirements on entities harvesting energy through hydraulic fracturing,
  • the Department of Transportation to promote stable and affordable gasoline and diesel prices, and
  • the Department of the Interior to promote the leasing of federal land for oil and natural gas production.

In addition, the Environmental Protection Agency (EPA) must identify and repeal certain regulations that substantially reduce energy independence. Further, the bill prohibits the use of any funds to implement the Paris Agreement on climate change. Finally, the bill rescinds (1) Executive Order 14008 about tackling climate change, (2) the 2021 proposed rule issued by the EPA and the U.S. Army Corps of Engineers about the scope of the Clean Water Act, and (3) the 2021 proposed rule issued by the EPA about methane gas emissions.

Federal Solar Panel Tax Deductions

Thanks to the American Energy Independence Act of 2022, which Extended the Federal Investment Tax Credit (ITC), sometimes called the federal solar tax credit, homeowners can deduct 30% of the price of a system and install.

  • In 2022, you could deduct 30%.
  • In 2023, you can deduct 30%.

State Solar Panel Rebates & Deductions

Individual states and cities offer their own policies, incentives and credits, as well. Some utility companies will even offer 10 to 20% rebates on your installation. With these incentives, combined with the ITC, you may be able to save as much as 50%.

  • Florida: Permanent sales tax exemption for solar energy products. Also, several utility companies are offering $500 rebates on solar water heating systems, which cost an average of just over $3,500.
Leave Solar Panel Installation to the Pros

DIY vs. Hiring a Professional Solar Installer

DIY kits fall around $1 to $2 per kilowatt. Considering that having the entire process handled by a professional contractor average around $2.50-3.50 per kilowatt, you may not be looking at a lot of savings.

SizeDIY*Professional Installation*
2kW$2,000 – $4,000$5,000 – $7,000
3kW$3,000 – $6,000$7,000 – $10,500
4kW$4,000 – $8,000$10,000 – $14,000
5kW$5,200 – $10,000$12,500 – $17,500
6.2kW$6,200 – $12,400$15,500 – $21,700
10kW$10,000 – $20,000$25,000 – $35,000

*Pre-tax credit cost.

Going with a professional has many benefits and the price difference is often insignificant. A professional will be able to help you with design, will be able to get higher quality products and materials at a lower rate, and will also be useful in acquiring permits and tax credits.

Cost of DIY Solar Panels

The cost of DIY solar panels runs $2,000 to $20,000 for a kit ranging from 2kW to 10kW. These kits include everything you need to install your own solar array. However, you may even look to building your own panels.

The costs to make your own system and build it from scratch are going to vary quite a lot depending on your level of skill. It’s a highly technical and specialized field. If you have a high level of electrical skills, you may be toying with the idea of building your own solar panels. The cost of solar cells and the silicon wafers used to create them are available to purchase individually. To build your own, you would typically put 60 of these wafers onto a backing and wire each of them. You would then need to connect this to an inverter.

Consider, however, that there are several risks associated with building your own, including:

  • You can’t be sure of the quality of solar cells purchased.
  • Homemade panels are often a fire hazard.
  • Many tax credits and incentives will not apply when systems are constructed outside of approved facilities.

Connecting to the Grid

Most solar kits are designed for off-grid systems, which wouldn’t demand as much energy as the average home, such as tiny houses or sheds. A typical off-grid PV system costs about $2.50 per watt.

Grid-tied packages range from $2.00 to $3.50 per watt. The grid can be very useful, providing electricity at night or in times of low sunlight. Being connected requires more components, such as meters and safety equipment. You will need to consult your local utility company about regulations and hire a licensed electrical contractor to connect you.


Is solar energy expensive?

The size of your panel installation and the needs of your home will affect your costs. An average-sized system (roughly 5 kilowatts) will cost between $25,000 and $35,000. Larger installations will require more hardware, planning and construction time. This can further increase costs. While solar panels are expensive, they have distinct benefits:

  • Savings: An average-sized system (5 kilowatts) can reduce up to 50% of your monthly electricity bill. Over a period of 20 years, these savings can add up to $30,000, based on your location and energy usage. Federal tax incentives are also making it easier to purchase systems.
  • Flexible payments: Solar purchase power agreements (PPAs) allow homeowners to purchase their panels with little to no money down. PPAs give homeowners immediate access to utility savings.
  • Increased Home Value: Lower utility bills improve the value of your home. In fact, the National Renewable Energy Laboratory (NREL) concluded that homes with solar panels sold for 17% more than homes with conventional utilities.

How much does one solar panel cost?

Solar panels normally retail for around $.70 to $1.50 per watt and range between 150 and 350 watts per panel, making the average cost of a single panel between $100 and $650. If you’re installing one panel, high-quality, high-output options are ideal. Here’s a look at the efficiency of common panel types:

  • Monocrystalline panels: 17%-24% efficient
  • Polycrystalline panels: 15%-20% efficient
  • Thin/film panels: 7%-14% efficient

Many retailers sell panels individually and as part of a larger system. It’s important to factor hardware and installation costs into your single-panel project as well. This portion of your installation can make up as much as 30% of your overall cost.

What’s the cost of solar panels per square foot?

They are rarely sold by the square foot. Instead, most retailers and pros sell panels by the watt. You can expect to pay between $.70 and $1.50 per watt.

We Will Keep Fighting

The IRA passed the Senate because of concessions made to the fossil fuel industry, so it will be crucial to continue advocating for comprehensive climate justice and an end to oil and gas infrastructure. This bill provides important momentum for the climate, but in order to achieve the clean and just future we know is possible we will need to stand up for our vulnerable communities, in our region and across our country.

To learn more about the climate impacts of the IRA, we recommend:

Solar Industry Research Data

Solar Industry Growing at a Record Pace

Solar energy in the United States is booming. Along with our partners at Wood Mackenzie Power & Renewables and The Solar Foundation, SEIA tracks trends and trajectories in the solar industry that demonstrate the diverse and sustained growth of solar across the country.

Below you will find charts and information summarizing the state of solar in the U.S. If you’re looking for more data, explore our resources page. In addition, SEIA Members have access to presentation slide decks that contain this data and much more. Not a SEIA Member? Join today!

Massive Growth Since 2000 Sets the Stage for the Solar+ Decade

In the last decade alone, solar has experienced an average annual growth rate of 33%. Thanks to strong federal policies like the solar Investment Tax Credit, rapidly declining costs, and increasing demand across the private and public sector for clean electricity, there are now more than 121 gigawatts (GW) of solar capacity installed nationwide, enough to power 23.3 million homes.

Solar as an Economic Engine

As of 2020, more than 230,000 Americans work in solar at more than 10,000 companies in every U.S. state. In 2021, the solar industry generated more than $33 billion of private investment in the American economy.

Growth in Solar is Led by Falling Prices

The cost to install solar has dropped by more than 60% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $20,000 today, while recent utility-scale prices range from $16/MWh – $35/MWh, competitive with all other forms of generation.

Supply Chain Constraints Lead to Price Increases

However, over the last 9 – 12 months, shipping constraints and other supply chain challenges stemming from the global pandemic and trade instability have led to price increases across the U.S. solar industry. For the first time since Wood Mackenzie began modeling solar system price data in 2014, year over year prices have increased across all market segments for three consecutive quarters, leaving utility-scale solar prices 18% higher than they were a year ago. Price increases have impacted deployment, with a third of Q4 2021 projects delayed a quarter or more, and 13% of expected 2022 projects delayed by a year or more or canceled outright.

Solar’s Share of New Capacity has Grown Rapidly

Solar has ranked first or second in new electric capacity additions in each of the last 9 years. In 2021, 46% of all new electric capacity added to the grid came from solar, the largest such share in history and the third year in a row that solar added the most generating capacity to the grid. Solar’s increasing competitiveness against other technologies has allowed it to quickly increase its share of total U.S. electrical generation – from just 0.1% in 2010 to nearly 4% today.

The U.S Solar Industry is a 50-State Market

While California has traditionally dominated the U.S. solar market, other markets are continuing to expand rapidly. In 2021, states outside of California made up their largest share of the market in the last decade, led by rapid growth in Florida and Texas. As demand for solar continues to grow, new state entrants will grab an increasing share of the national market.

Prices Decline for Rooftop Solar, but Higher Soft Costs Remain

The biggest cost-decline opportunity in residential and small commercial solar exists in soft costs, which includes installation labor, customer acquisition, and permitting/inspection/interconnection. While the soft cost share of total system costs has stabilized in recent months due to increased customer demand, rising hardware costs and pandemic-related improvements to permitting practices, U.S. solar soft costs continue to be much higher than those of other developed solar markets around the world. Through programs like Solar Automated Permit Processing (SolarAPP) and SolSmart, SEIA and our partners are working to reduce local barriers to going solar.

Storage is Increasingly Paired with All Forms of Solar

Homeowners and businesses are increasingly demanding solar systems that are paired with battery storage. While this pairing is still relatively new, the growth over the next five years is expected to be significant. By 2025, over 29% of all new behind-the-meter solar systems will be paired with storage, compared to under 11% in 2021. The utility-scale market is also recognizing the benefits of pairing solar with storage, with over 45 GW of commissioned or announced projects paired with storage, representing over 50 GWh of storage capacity.

Residential Market Continues to Diversify

The residential solar market experienced its 5th consecutive record year in 2021, growing 30% over 2020 with 4.2 GW installed. Customers continue to be motivated by increasing household electricity bills brought on by the pandemic, power outages and low financing costs. That growth is threatened however, by proposed changes to Net Metering rules in multiple states. In California’s NEM 3.0 case, the proposed decision issued by the Public Utilities Commission could cut the California market in half by 2024. Details on future NEM 3.0 proposals are forthcoming.

Corporate Clean Energy Goals Boost Commercial Solar

The commercial solar market, which consists of on-site solar installations for businesses, non-profits and governments, has grown unevenly in recent years as the industry continues to unlock the financing tools needed to provide access to a wide swath of business types. However, sustained adoption by large companies with clean energy goals like Walmart, Apple, Target and Amazon will help push the segment to near-record levels in 2022. With a little more than 1% of commercial electricity demand served by on-site solar, there remains significant opportunity for growth in this segment.

New State Entrants Help Fuel Community Solar Growth

While early growth for community solar installations was led primarily by three key markets – New York, Minnesota, and Massachusetts – a growing list of states with community solar programs have helped diversify the market, creating large pipelines set to come to fruition over the next several years. Continued growth in state community solar programs and improvements to state and regional interconnection processes are imperative to ensure solar access for all types of homeowners and businesses.

Large Utility-Scale Solar Pipeline Outpaces Installs

The utility scale solar market faced a host of challenges in 2021 as the pandemic wreaked havoc on international supply chains and labor availability, pushing prices to their highest levels in three years. Multiple circumvention petitions seeking to prohibit module imports from certain countries have further exacerbated supply chain challenges and if adopted could have devastating impacts on the industry. The combination of headwinds has resulted in delays and cancelations for many projects, resulting in a 19% reduction in utility-scale deployment forecasts in 2021/2022 over the last six months. Despite this, demand for utility-scale solar remains strong as increasing numbers of states, utilities and corporations seek to fulfill their clean energy goals.

Solar PV Growth Forecast

The U.S. Solar market installed a record 23.6 GW in 2021, despite supply chain challenges brought on by the pandemic and trade disputes. Pricing and procurement challenges will continue to impact deployment in 2022, leading to the first annual decline in the market in 4 years. Assuming supply chain recovery and no major trade barriers, growth should resume in 2023 ahead of Investment Tax Credit step down in 2024. Barring new policy developments at the state and federal levels, industry growth through the end of the decade is premised on continued price declines and growing demand from utilities, states, corporations, and distributed solar customers.

More Aggressive Growth Needed to Reach Climate Goals

While projected growth over the next 10 years puts the solar market in reach of ambitious clean energy goals set by the industry and the Biden administration, more work is needed to achieve the pace required for a 100% clean energy electricity system. Annual installs will need to grow from less than 20 GW in 2020 to more than 90 GW by 2030, with cumulative totals nearing 700 GW by the end of the decade. A combination of private sector innovation and stable, long-term public policy will set the solar industry on a path to achieving these more aggressive goals to address climate change and decarbonize the economy.

Solar Helps Fortune 500 Companies Save Money

Data from SEIA’s annual Solar Means Business report show that major U.S. corporations, including Apple, Amazon, Walmart, Target, and Google are investing in solar and renewable energy at an incredible rate. Through 2019, the top corporate solar users in America have installed more than 8,300 MW of capacity across more than 38,000 different facilities across the country.

Other key takeaways:

  • Corporate solar adoption has expanded rapidly over the past several years, with two thirds of all capacity installed since 2015.
  • The 1,286 MW installed in 2019 represents a 10% increase from 2018 and is second to only 2017 for annual commercial deployment.
  • The surge in on-site commercial solar continued in 2019, with a record 844 MW installed, while 441 MW of off-site projects were completed.
  • The systems tracked in this report generate enough electricity each year to power 1.6 million U.S. homes.

top corporate solar users

You can explore SEIA’s Solar Means Business report, including interactive maps and data tools on the top corporate solar users in the U.S.




Our Commitment

The Solar Energy Industries Association (SEIA) is committed to strict compliance with all Federal and state laws and regulations, and to the highest ethical standards in the way we conduct our operations. This includes strict compliance with federal and state antitrust laws, to protect and enhance our country’s free, competitive economy.  

You are Responsible for your Antitrust Compliance.

Compliance with the antitrust laws is a serious business. Antitrust violations may result in heavy fines for corporations, and in fines and imprisonment for individuals. While SEIA may provide guidance on antitrust matters, you bear the ultimate responsibility for assuring that your actions comply with the antitrust laws.  

SEIA’s Antitrust Guidelines

You must avoid any discussions or conduct that might violate or even appear to violate the antitrust laws.

The following guidelines will help you do that:

   Do consult with antitrust counsel about any documents or data that could raise antitrust issues, such as information about prices, production, or any proposed action that may disadvantage customers or competitors.      Do consult with antitrust counsel on any non-routine correspondence that requests an SEIA member company to participate in projects or programs with others, collect data for such activities, or otherwise join other member companies in SEIA actions.      Do follow an approved agenda. Have counsel review the agenda and minutes of the meeting before they are put into final form and circulated.      Do not communicate – either directly or indirectly — with other member companies about:      Any company’s (including your own) prices for products or services;    Discounts, credit terms, other terms of sale, profit margins or anything else that might affect prices;    Allocating markets, customers, territories or products with your competitors;    Bids for, or solicitations of, particular customers or business;    Limiting production;    Any company’s (including your own) inventory, capacity, or production;    Whether or not, or how, to deal with any other company;    Any marketing or production plans or other competitively sensitive information concerning your own company or a competitor.    Do not stay at a meeting, or any other gathering, if those kinds of discussions are taking place and do note your objection to the discussion.    Do not take notes or create any documents or other records that might be misinterpreted to suggest that SEIA condones or is involved in anticompetitive behavior.  

Just Contact us for Help.

  Whenever you have any question about whether particular SEIA activities might raise antitrust problems, please contact us immediately.

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