The U.S. residential solar PV market size was estimated at USD 9.1 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2021 to 2028. The market is driven by the presence of favorable policies and regulations for net metering and financial incentives such as Investment Tax Credit (ITC) in the U.S.
Decrease in solar PV (photovoltaic) installation costs in the last decade has resulted in high growth of solar PV in the U.S. Further, the presence of easy solar financing options provides a number of options for residential end-users to choose from, which has propelled the growth of the market.
The rise in environmental concerns regarding the increase in carbon emissions owing to the usage of conventional fuels for transportation and power generation purposes has prompted countries around the world to opt for cleaner and efficient sources of power. Furthermore, the long-term power generation goals of North American countries such as the U.S., Canada, and Mexico have given impetus to the growth of clean energy technologies.
For instance, the U.S. states such as California, New York, Maryland, Nevada, and Massachusetts, along with Canadian provinces such as Alberta and Ontario, have included residential solar PV systems in their current policies and action plans and have set targets for the deployment of residential solar PV systems in their respective territories. These factors have helped drive the market for residential solar PV systems in the region. Currently, the U.S. has a dominating share in the installed capacity of residential solar PV among countries in North America.
The government of Mexico has also set up an ambitious goal to reduce carbon emissions by targeting to obtain 35% of power generation from clean energy sources by 2035 and expand it to 50% by 2050. The Mexican government is emphasizing the deployment of residential solar PV in the country. For instance, Mexico had an installed capacity of 173 MW in 2015, which has increased to 4,426 MW in 2019 owing to favorable policies and regulations in the country.
Increasing demand for renewable-based clean power generation, coupled with supportive government policies, incentives, and tax rebates to install residential solar PV systems, is projected to boost the market in the region in the upcoming years. Firms in the industrial and utility sectors are among the prime consumers of solar PV in the region due to their large-scale green power requirements. The residential and commercial segments have been gaining momentum owing to the availability of net metering schemes for grid-connected systems and the availability of options to integrate battery storage systems for off-grid connected systems.
The retrofit construction segment dominated the market and accounted for the largest revenue share of 72.6% in 2020. This high share is attributable to rising environmental concerns that have prompted regulatory authorities to draft supporting policies and plans for residential solar PV in the country.
The regulatory authorities emphasize the potential of solar PV installation in residential buildings. These factors have resulted in the introduction of supporting policies and plans from regulators for residential solar PV systems in the U.S. For instance, the solar Investment Tax Credit (ITC), enacted in 2006, has been one of the major policy tools driving solar PV installation in the U.S.
Currently, ITC provides a 26.0% tax credit for the installation of solar systems on residential properties under Section 25D. A tax credit under the provision of the scheme provides a dollar-for-dollar decrease in the income tax that a person would have otherwise paid to the federal government. This has provided a thrust for residential end-users to opt for solar PV systems to get tax incentives. However, the government is planning to limit ITC at 22% for the residential sector by 2023, and remove ITC for the residential sector from 2024 onward, which is expected to hinder the growth of the market in the retrofit segment.
California dominated the U.S. residential solar PV market and accounted for the largest revenue share of 33.3% in 2020. It has the largest solar market in the U.S. owing to the various economic and environmental benefits including several local investments to increase the residential solar PV installations in the state. Currently, more than 20% of the state’s power generation comes from solar energy.
The presence of favorable policies and regulations such as net metering for solar PV in the state has been a major reason for its dominance in the market. Further, the presence of various incentives for residential end-users for the installation of solar PV systems has provided a boost to the market in the state.
New York has a substantial solar energy potential and has constantly been in the top ten states of the U.S. solar PV market. The state has numerous policies in place to promote investments in solar energy that includes net metering and a feed-in tariff through Long Island Power Authority. Through its ‘Reforming the Energy Vision’ docket, the Energy Commission is revising the regulations and providing an environment needed to boost a more effective power system, that includes large deployment of distributed generation energy.
In October 2020, Sunrun announced that it acquired Vivint Solar. With this acquisition, the company became the leader of home solar and energy services provided across the U.S.In January 2021, SPI Energy announced SolarJuice American, Inc. and Petersen Dean Inc. had entered into a court-approved comprehensive interim management agreement that will allow both the companies to prepare for the sale of Petersen Dean Inc.’s assets to Solarjuice American Inc. Some of the prominent players in the U.S. residential solar PV market include:
Tesla
SunPower Corporation
Sunrun
Trinity Solar Inc.
Sungevity
Momentum Solar
Petersen Dean Inc.
ACE Solar
Sunlux
Titan Solar Power
Report Attribute |
Details |
Market size value in 2021 |
USD 10.4 billion |
Revenue forecast in 2028 |
USD 14.1 billion |
Growth Rate |
CAGR of 5.6% from 2021 to 2028 |
Base year for estimation |
2020 |
Historical data |
2016 - 2019 |
Forecast period |
2021 - 2028 |
Quantitative units |
Volume in MW, revenue in USD million, and CAGR from 2021 to 2028 |
Report coverage |
Volume forecast, revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Construction, state |
Country scope |
U.S. |
State scope |
California; New York; Arizona; New Jersey; Massachusetts; Texas; Rest of the U.S. |
Key companies profiled |
Tesla; SunPower Corporation; Sunrun; Trinity Solar Inc.; Sungevity; Momentum Solar; Petersen Dean Inc.; ACE Solar; Sunlux; Titan Solar Power |
Customization scope |
Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue and volume growth at country level and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the U.S. residential solar PV market report on the basis of construction and state:
Construction Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)
Retrofit
New Construction
State Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)
California
New York
Arizona
New Jersey
Massachusetts
Texas
Rest of the U.S.
b. The U.S. residential solar PV market size was estimated at USD 9.1 billion in 2020 and is expected to reach USD 10.4 billion in 2021.
b. The U.S. residential solar PV market is expected to grow at a compound annual growth rate of 5.6% from 2021 to 2028 to reach USD 14.1 billion by 2028.
b. The retrofit segment dominated the U.S. residential solar PV market with a share of 72.5% in 2020. This is attributable to rising environmental concerns that have prompted regulatory authorities to draft supporting policies and plans for solar PV.
b. Some key players operating in the U.S. residential solar PV market include Sunrun, Momentum Solar, SPI Energy, and SunPower Corporation.
b. Key factors that are driving the U.S. residential solar PV market growth included decreasing solar PV cost along with easy availability of finance.
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