US added record amounts of small solar power in 2022

Tuesday, September 12, 2023

A recordbreaking amount of small-scale solar electric generating capacity was added to the U.S. grid in 2022, as the nation added more distributed solar than in any prior year according to federal energy data. 

The U.S. Energy Information Administration tracks the nation's portfolio of electric generation resources. EIA considers solar-power systems with one megawatt (MW) of capacity or less to be "small-scale solar", also called distributed solar or rooftop solar.

According to EIA, U.S. small-scale solar capacity has grown consistently year-over-year since the agency started tracking it in 2014. In the ensuing eight years, U.S. small-scale solar capacity grew from 7.3 gigawatts (GW) to reach 39.5 GW in 2022. 

About one-third of the total solar capacity in the U.S. now comes from small-scale systems. EIA reports that rooftop solar panels installed on homes make up the majority of the nation's small-scale solar capacity. Additional small-scale solar power systems are installed in commercial and industrial contexts.

EIA attributes growth in small-scale solar capacity over the past decade to tax credits and incentives, public policy, and higher retail electricity prices, as well as falling solar panel costs. The federal tax code includes tax credits for investments in small-scale solar power and other forms of clean energy. The scope and value of these credits was enhanced by the enactment of the Inflation Reduction Act. 

In addition, many states offer state-level incentives for solar power production. Diversity among state levels of solar adoption isn't just about how sunny a place might be, as EIA posits that the levels of state incentives affect the degree to which solar projects are developed in each state. 

EIA also notes that while many states with the most small-scale solar capacity also have large populations (like California and New York), some smaller states like Hawaii, Rhode Island, Maine, and Vermont have high levels of market penetration on a watts-per-capita basis.

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