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Solar energy is one of the fastest growing clean energy sources in the US, according to the Department of Energy. Of the more than 3 million solar energy installations in the US, about 1 million were built in the last two years.

That growth is especially true for residential-based solar power. In 2005, Congress passed a tax credit for residential solar generation. Since then, the number of US homes with installed solar panels increased by an average of 32% a year, according to the National Renewable Energy Laboratory. At the end of 2020, there were about 2.7 million residential solar systems in the US.

Solar energy production overall has increased six-fold since 2014. Residential solar generated enough power to sustain an average of about 633,000 homes in 2014 to about 1.9 million homes in 2019, according to the US Energy Information Administration (EIA).

Despite the growth, a small percentage of all homes have solar panels installed. About 3.2% of single-family detached homes have installed solar panels. Residential solar also generates a smaller percentage of total US energy production, making up less than 1% of all energy production in 2021.

Solar farms and other utility-scale facilities produced enough electricity to power over 10 million homes in 2021, a total of about 111 million megawatthours. Solar farms generated seven times more power in 2021 than in 2014.

Solar energy produced through homes, businesses and other small-scale facilities generated 49 million megawatthours, which is enough electricity to power nearly 4.4 million homes in 2021. That level of production is more than four times the amount from 2014.[1]

Small-scale solar energy production more than doubled between 2014 and 2021

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How does solar energy production work?

A variety of technologies convert sunlight to usable energy for buildings. Solar photovoltaics (PV) is the most used solar technology to power homes and businesses, according to the Energy Department. PV devices change sunlight directly into electricity. Arrangements of many PV panels can produce electricity for an entire house or small business, also known as small-scale generation. Some PV power plants have large arrays that cover many acres, known as solar farms, to produce electricity for thousands of homes.

Other solar energy technologies include passive solar technology, solar water heating, solar process heating, and concentrated solar power generation.

Where is solar energy produced?

Homes in California produced the most solar energy compared to any other state in 2019, producing 9.3 million megawatthours, or enough electricity to power an average of about 851,000 homes. That amount of power is 18 times larger than the amount of solar power the state produced a decade ago. Arizona was second, producing enough electricity to power more than 163,000 homes.

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California also leads the nation in small-scale solar installations, housing almost 40% of all small-scale PV. From 2016 to 2019, California added 5.3 gigawatts of new small-scale solar capacity, more than any other state.

California’s large population, abundant sunshine, and government programs and incentives have driven both small-scale and utility-scale solar growth, according to the EIA. At the beginning of 2020, the California solar mandate took effect, requiring most new homes built in the state to have a solar electricity system.

How much does solar energy cost to build?

Solar energy costs more to build than most other sources of energy production, in terms of cost per kilowatt produced. In 2019, the average installation cost of solar energy was $1,796 per kilowatt produced. That cost is higher than for facilities running on fossil fuels such as petroleum liquid or natural gas. By the same measure, it’s also more costly than building new wind power production.

From 2013 to 2019, the cost of building a new PV project dropped by about 52%, according to the EIA.

In 2019 solar energy cost $1796 per kilowatt to construct

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Learn more about renewable energy at USAFacts’ State of the Earth report and in the Energy and Environment section of the State of the Union in Numbers.

[1]

The count of solar energy production does not include solar thermal energy.