How many U.S. homes have solar panels?
The solar energy sector in the U.S. has experienced a 24% annual growth rate in the past decade. This remarkable growth is attributable, among other factors, to the presence of federal policies such as the solar Investment Tax Credit (ITC), the escalating demand for clean electricity in both the private and public sectors and a reduction in the costs of solar energy technology. Projections indicate that by 2030, approximately 15% of American households will have solar photovoltaic (PV) systems in place.
- There are approximately 3.2 million homes with solar panel installations across the U.S.
- In 2020, 3.7% of single-family homes in the U.S. generated electricity from solar panels.
- The year 2023 marked the first time that solar panel efficiency surpassed the threshold of 30%, making it a groundbreaking year for improvement. Most solar panels offered today typically have efficiency ratings ranging from 15% to 22%.
- California has the largest number of homes powered by solar, accounting for almost 42% of solar-powered homes in the U.S. and 39.3% of residential generation capacity.
- Annual U.S. residential solar installation capacity increased 40.5% in 2022 to 5.900 megawatts.
What is a solar home?
A solar home is a home equipped with a PV system, most likely in the form of rooftop panels. A PV system converts solar energy into electricity. Photons from sunlight are absorbed by the panel's cells, creating an electric field across the panel's layers and inducing the flow of electricity.3 This electricity can be used immediately or stored to be used at a later time.
Residential solar panel installations
There are approximately 3.2 million homes with solar panel installations across the U.S.
In 2020, 3.7% of single-family homes in the U.S. generated electricity from solar panels. The western part of the country has the most residential solar panels. The geographic distribution is as follows:
- West: 8.9%
- Northeast: 4.7%
- South: 1.7%
- Midwest: 1.4%
Annual PV installation capacity in the U.S. residential sector increased from a mere 27 megawatts in 2005 to 5,900 megawatts in 2022. The largest amount of relative annual growth occurred in 2009, which saw a 100% increase in PV residential installation capacity from 2008.
Annual U.S. residential solar installation capacity (2005 to 2022)
|Year||Capacity (megawatts)||Percentage increase/decrease from previous year|
Types of solar equipment
When researching different types of solar panels, it's important to grasp the subtle distinctions between the two main technologies, their efficiency, lifespan, and general costs.
Monocrystalline vs. polycrystalline
The two predominant solar panel technologies in use today are monocrystalline and polycrystalline panels, which account for approximately 95% of the PV energy market.
- Both rely on silicon as the primary material for solar power generation.
- Monocrystalline panels, while more costly, offer greater efficiency, making them optimal for residential installations with limited space.
- In contrast, polycrystalline panels are preferred when spatial constraints are less significant.
Solar panel efficiency
The efficiency of a solar panel refers to the panel's ability to capture sunlight and convert it into usable electricity.
Most solar panels offered today typically have efficiency ratings ranging from 15% to 22%. However, 2023 has been described as a “groundbreaking year” in solar energy technology, and for the first time ever, solar power cells have surpassed the threshold of 30% energy efficiency.
Solar panel lifespan
The majority of solar panels have an approximate lifespan of 25 to 30 years.
- There are many factors that affect the durability of solar panels, including the panels’ construction and type, the angle at which the panels are installed and the panels’ maintenance.
- Environmental factors affecting panel lifespan include local conditions such as temperature, humidity and wind speed.
Cost of solar panels
For a 6-kilowatt (kW) system, the average cost of solar panels is $11,810 after factoring in federal tax credits.
- Personal factors, like a homeowner’s roof size and energy requirements, can push solar panel costs to $30,000 or more.
- Costs fluctuate substantially from one state to another based on factors such as local labor rates and state government incentives.
The average cost of solar panels by state can be found in the following tables:
|Average cost per watt||Typical system size||Average cost after ITC||Payback period*||Estimated net savings|
|Alabama||$2.45||11.5 kW||$19,723||11 years||$28,590|
|Alaska||$2.41||6 kW||$10,122||7 years||$34,500|
|Arizona||$2.61||11.5 kW||$21,011||12 years||$23,891|
|Arkansas||$2.54||11 kW||$19,558||13 years||$15,567|
|California||$2.73||4.5 kW||$11,466||8 years||$30,000|
|Colorado||$2.69||7.5 kW||$14,123||12 years||$14,479|
|Connecticut||$2.80||7.5 kW||$14,700||8 years||$42,705|
|Delaware||$2.58||9.5 kW||$17,157||12 years||$29,016|
|Florida||$2.53||11.5 kW||$20,367||12 years||$21,500|
|Georgia||$2.55||11 kW||$19,635||12 years||$23,182|
|Hawaii||$2.67||5.5 kW||$10,280||6 years||$49,459|
|Idaho||$2.60||10 kW||$18,200||14 years||$11,478|
|Illinois||$2.73||7.5 kW||$14,333||12 years||$16,585|
|Indiana||$2.68||9.5 kW||$17,822||12 years||$21,994|
|Iowa||$2.77||9 kW||$17,451||12 years||$17,572|
|Kansas||$2.59||9 kW||$16,317||11 years||$21,455|
|Kentucky||$2.34||11 kW||$18,018||12 years||$20,247|
|Louisiana||$2.57||12.5 kW||$22,488||14 years||$13,646|
|Maine||$2.83||5.7 kW||$11,886||10 years||$25,880|
|Maryland||$2.77||10 kW||$19,390||12 years||$21,395|
|Massachusetts||$2.94||6.5 kW||$13,377||8 years||$33,013|
|Michigan||$2.81||7 kW||$13,769||10 years||$23,652|
|Minnesota||$2.84||8 kW||$15,904||12 years||$17,546|
|Mississippi||$2.64||11.5 kW||$21,252||13 years||$20,147|
|Missouri||$2.59||10.5 kW||$19,037||13 years||$18,292|
|Montana||$2.54||9 kW||$16,002||13 years||$15,189|
|Nebraska||$2.83||10.5 kW||$20,801||14 years||$13,421|
|Nevada||$2.52||10 kW||$17,640||12 years||$18,319|
|New Hampshire||$2.91||6.5 kW||$13,241||9 years||$28,409|
|New Jersey||$2.77||7 kW||$13,573||10 years||$23,806|
|New Mexico||$2.68||7 kW||$13,132||12 years||$15,413|
|New York||$2.94||6.5 kW||$13,423||10 years||$24,387|
|North Carolina||$2.54||6 kW||$13,815||13 years||$20,035|
|North Dakota||$2.42||11 kW||$18,634||13 years||$26,028|
|Ohio||$2.56||9.5 kW||$16,128||12 years||$19,272|
|Oklahoma||$2.62||11 kW||$20,174||14 years||$14,190|
|Oregon||$2.60||9.5 kW||$17,290||14 years||$23,058|
|Pennsylvania||$2.55||8.5 kW||$15,173||10 years||$23,634|
|Rhode Island||$2.84||6 kW||$11,928||8 years||$34,519|
|South Carolina||$2.72||11 kW||$20,944||12 years||$24,561|
|South Dakota||$2.39||10.5 kW||$17,566||12 years||$22,923|
|Tennessee||$2.49||12 kW||$20,916||13 years||$19,688|
|Texas||$2.69||8.5 kW||$21,654||13 years||$21,350|
|Utah||$2.68||8 kW||$15,008||14 years||$10,202|
|Vermont||$2.87||6 kW||$12,054||9 years||$26,468|
|Virginia||$2.75||11 kW||$21,175||12 years||$21,692|
|Washington||$2.69||10 kW||$18,830||16 years||$10,846|
|West Virginia||$2.64||11 kW||$20,328||13 years||$19,893|
|Wisconsin||$2.60||7 kW||$12,740||10 years||$21,005|
|Wyoming||$2.57||9 kW||$16,191||13 years||$14,959|
Solar tax benefits
The solar ITC is a federal program that allows eligible property owners to receive a federal tax credit equal to 30% of the expenses associated with installing a solar energy system. This credit applies and will apply to solar energy systems installed between the years 2022 and 2032.
In addition to the federal tax credit, homeowners can also qualify for solar incentives offered by states and other programs at the local level. Examples of these types of incentives include:
- Net metering: This enables residential and commercial customers who generate electricity from their own solar power systems to sell the electricity they don't consume back to the grid.
- Property tax exemption: Property tax exemptions allow homeowners to exclude the added value of a solar energy system when their property tax is determined.
- Sales tax exemption: Sales tax exemptions involve a waiver of the state's sales tax when acquiring a solar energy system. These waivers can significantly decrease the initial costs associated with a solar installation.
The table below offers a summary of these solar incentive programs by state. However, this is not an exhaustive review, as states, local governments and local utilities offer homeowners other incentive programs to promote the adoption of solar energy technology.
|State||Net metering||Property tax exemption||Sales tax exemption|
Trends in residential solar installation
The residential solar market saw a 30% increase in the second quarter of 2023 in comparison with that same period during the previous year. However, some solar panel installation experts have simultaneously reported unexpectedly slow installation rates during the first six months of 2023, and growth has been relatively weak in traditionally strong solar installation markets like Texas and Arizona.
Slowing demand in some markets can be attributed to several factors, including customer concerns about an impending economic downturn, reduced urgency to transition to solar power due to the extension of the ITC, increased interest rates and inflation. That said, nationwide solar energy installation has remained strong in recent years, and continued growth is anticipated overall.
- The residential PV market in the U.S. is projected to grow at an annual rate of between 6% and 8% through 2028.
- Small-scale solar installation — i.e., installations in facilities with one megawatt of capacity or less — increased in the U.S. from 4.4 gigawatts (GW) of added capacity in 2020 to 5.4 GW in 2021, a growth of 23%. Most small-scale solar installations are residential.
- Residential installation accounted for most of the capacity increase in 2021, totaling more than 3.9 GW.
What percentage of U.S. homes generate electricity from solar?
In 2020, 3.7% of single-family homes in the U.S. generated electricity from solar panels.
How many homes in the U.S. have solar systems?
There were approximately 3.2 million installations of solar systems within residential properties across the U.S. by the end of 2021.
How has installed PV capacity in the residential sector evolved over the past decade in the U.S.?
Annual installed PV capacity in the residential sector has increased almost every year over the past decade, with 2015 experiencing the biggest annual increase (70.5%) over the previous year. The only exception to the trend was 2017, which saw a decrease of 13.8% in comparison with 2016.
- Solar Energy Industries Association. “ Solar Industry Research Data ”. Solar Energy Industries Association. Evaluated Oct. 21, 2023.
- Solar Energy Industries Association. “ Solar Data Cheat Sheet ”. Solar Energy Industries Association. Evaluated Oct. 20, 2023.
- Office of Energy Efficiency and Renewable Energy. “ Homeowner’s Guide to Going Solar ”. Office of Energy Efficiency and Renewable Energy. Evaluated Oct. 19, 2023.
- Carrington D. “ ‘Revolutionary’ solar power cell innovations break key energy threshold ”. The Guardian. Evaluated Oct. 19, 2023.
- Ruiz A. “ 35 Latest Solar Power Statistics, Charts & Data ”. TheRoundup. Evaluated Oct. 20, 2023.
- Fernández L. “ Annual solar PV capacity installations in the U.S. residential sector from 2005 to 2022 ”. Statista. Evaluated Oct. 20, 2023.
- U.S. Energy Information Administration. “ Electric Power Monthly ”. U.S. Energy Information Administration. Evaluated Oct. 21, 2023.
- Solar Energy Industries Association. “ Solar State By State ”. Solar Energy Industries Association. Evaluated Oct. 19, 2023.
- U.S. Energy Information Administration. “ Homes and buildings in the West and Northeast have the largest share of small-scale solar ”. U.S. Energy Information Administration. Evaluated Oct. 20, 2023.
- ONIT Home. “ Incentives for switching to solar in your state ”. ONIT Home. Evaluated Oct. 20, 2023.
- Solar Energy Industries Association. “ Net Metering ”. Solar Energy Industries Association. Accessed Oct. 21, 2023.
- Solar Energy Industries Association. “ Solar Tax Exemptions ”. Solar Energy Industries Association. Evaluated Oct. 21, 2023.
- U.S. Energy Information Administration. “ Record numbers of solar panels were shipped in the United States during 2021 ”. U.S. Energy Information Administration. Evaluated Oct. 21, 2023.
- Solar Energy Industries Association. “ Solar Market Insight Report 2023 Q3 ”. Solar Energy Industries Association. Evaluated Oct. 21, 2023.
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