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"I'd put my money on the Sun and Solar Energy, what a source of Power! I hope we don't have to wait until oil and coal run out, before we tackle that." -Thomas Edison

"Solar energy is a clean alternative energy source. It's clear, given the current energy crisis, that we need to embrace new sources of renewable energy that are good for our planet. I believe very strongly in using technology to provide affordable options that all consumers can put into practice." -Yang Yang UCLA Engineering Professor

"We were delighted to have worked with Microsoft on its electric solar system. Microsoft is effectively lowering operating costs, reducing purchases of expensive peak electricity, and improving the health and quality of life in California through its Silicon Valley Campus solar power program." -Dan Shuga President of PowerLight




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Part of the 354 MW SEGS solar complex in northern San Bernardino County, California.
A view of solar panels installed in 2011 on the roof of Space and Naval Warfare Systems Command Headquarters, San Diego. The rooftop photovoltaic installation supports the Department of Defense's goal of increasing renewable energy sources to 25 percent of all energy consumed by the year 2025.

Solar power in the United States includes utility-scale solar power plants as well as local distributed generation, mostly from rooftop photovoltaics. As of the end of 2015, the U.S. has 25 gigawatts (GW) of installed photovoltaic capacity with an additional 1.8 GW of concentrated solar power. In the twelve months through May 2016, utility scale solar power generated 29.5 terawatt-hours (TWh), 0.73% of total U.S. electricity. During the same time period total solar generation, including estimated distributed solar photovoltaic generation, was 43.2 TWh, 1.07 % of total U.S. electricity. In 2015, 30% of all new electricity generation capacity in the country came from solar.

The United States conducted much early research in photovoltaics and concentrated solar power. The U.S. is among the top countries in the world in electricity generated by the Sun and several of the world's largest utility-scale installations are located in the desert Southwest. The oldest solar power plant in the world is the 354-megawatt (MW) SEGS thermal power plant, in California. The Ivanpah Solar Electric Generating System is a solar thermal power project in the California Mojave Desert, 40 miles (64 km) southwest of Las Vegas, with a gross capacity of 392 MW. The 280 MW Solana Generating Station is a solar power plant near Gila Bend, Arizona, about 70 miles (110 km) southwest of Phoenix, completed in 2013. When commissioned it was the largest parabolic trough plant in the world and the first U.S. solar plant with molten salt thermal energy storage.

There are plans to build many other large solar plants in the United States. Many states have set individual renewable energy goals with solar power being included in various proportions. Governor Jerry Brown has signed legislation requiring California's utilities to obtain 33 percent of their electricity from renewable energy sources by the end of 2020.



A 1997 report by the United States Department of Energy found available domestic solar energy (including biomass) technically accessible regardless of cost amounted to 586,687 Quadrillion BTUs (Quads); 95% of this was biomass. Coal represented the second largest resource, a distant 38,147 Quads. Predictions of how much solar power was economically feasible to collect amounted to 352 quads, compared with 5,266 quads from coal. The assumptions used in the report were based on a predicted 2010 price of a barrel of oil being $38, and multiplied annual renewable resources by 30 for comparison with non-renewable resources. The total annual energy consumption of the United States in 2007 was approximately 100 Quads, less than 0.5% of what is theoretically available from sunlight.

A 2012 report from the National Renewable Energy Laboratory described technically available renewable energy resources for each state and estimated that urban utility scale photovoltaics could supply 2,232 TWh/year, rural utility scale PV 280,613 TWh/year, rooftop PV 818 TWh/year, and CSP 116,146 TWh/year, for a total of almost 400,000 TWh/year, 100 times current consumption of 3,856 TWh in 2011. Onshore wind potential is estimated at 32,784 TWh/year, and offshore wind at 16,976 TWh/year. The total available from all renewable resources is estimated at 481,963 TWh/year.


U.S. solar electricity production since 1985
Monthly solar power generation in the U.S. since 2008
Trends in commercial solar electrical power generation in the top five states, 1990–2012 (U.S. EIA data)

Solar energy deployment increased at a record pace in the United States and throughout the world in 2008, according to industry reports. The Solar Energy Industries Association's "2008 U.S. Solar Industry Year in Review" found that U.S. solar energy capacity increased by 17% in 2007, reaching the total equivalent of 8,775 megawatts (MW). The SEIA report tallies all types of solar energy, and in 2007 the United States installed 342 MW of solar photovoltaic (PV) electric power, 139 thermal megawatts (MWth) of solar water heating, 762 MWth of pool heating, and 21 MWth of solar space heating and cooling.

A report finds that solar power's contribution could grow to 10% of the nation's power needs by 2025:

"The report, prepared by research and publishing firm Clean Edge and the nonprofit Co-op America, projects nearly 2% of the nation's electricity coming from concentrating solar power systems, while solar photovoltaic systems will provide more than 8% of the nation's electricity. Those figures correlate to nearly 50,000 megawatts of solar photovoltaic systems and more than 6,600 megawatts of concentrating solar power.
"As noted in the report, solar power has been expanding rapidly in the past eight years, growing at an average pace of 40% per year. The cost per kilowatt-hour of solar photovoltaic systems has also been dropping, while electricity generated from fossil fuels is becoming more expensive. As a result, the report projects that solar power will reach cost parity with conventional power sources in many U.S. markets by 2015. But to reach the 10% goal, solar photovoltaic companies will also need to streamline installations and make solar power a "plug-and-play" technology, that is, it must be simple and straightforward to buy the components of the system, connect them together, and connect the system to the power grid.
"The report also places some of the responsibility with electric utilities, which will need to take advantage of the benefits of solar power, incorporate it into future "smart grid" technologies, and create new business models for building solar power capacity. The report also calls for establishing long-term extensions of today's investment and production tax credits, creating open standards for connecting solar power systems to the grid, and giving utilities the ability to include solar power in their rate base."

According to a study by the Solar Energy Industries Association and GTM Research, 878 megawatts (MW) of photovoltaic (PV) capacity and 78 MW of concentrating solar power (CSP) were installed in the U.S. in 2010, enough to power roughly 200,000 homes. In addition, more than 65,000 homes and businesses added solar water heating (SWH) or solar pool heating (SPH) systems. This was double the 435 MW installed in 2009 around the U.S.

According to a 2011 survey conducted by independent polling firm Kelton Research, nine out of 10 Americans support the use and development of solar technology. Eight out of 10 respondents indicated that "the federal government should support solar manufacturing in the U.S. and should give federal subsidies for solar energy". According to the Energy Information Administration, in fiscal year 2013, federal supports and subsidies for solar power amounted to $4.4 billion, over 27% of all federal supports and subsidies for electricity production. This figure does not include state and local spending.

Solar Energy Industries Association and GTM Research found that the amount of new solar electric capacity increased in 2012 by 76 percent from 2011, raising the United States’ market share of the world’s installations above 10 percent, up from roughly 5 to 7 percent in the last seven years.

According to the U.S. Energy Information Administration, as of September 2014 utility-scale solar had sent 12,303 gigawatt-hours of electricity to the U.S. grid. This was an increase of over 100% versus the same period in 2013 (6,048 GWh).

The number of homes with solar systems installed has been increasing rapidly; from 30,000 in 2006 to 400,000 in 2013 with a study by the U.S. Department of Energy predicting the figure could reach 3,800,000 homes by 2020.

Solar thermal power

Nevada Solar One, with the Las Vegas Valley beyond the mountains behind it.


One of the first applications of concentrated solar was the 6 hp solar powered motor made by H.E. Willsie and John Boyle in 1904.

An early solar pioneer of the 19th and 20th century, Frank Shuman, built a demonstration plant that used solar power to pump water using an array of mirrors in a trough to generate steam. Located in Philadelphia, the solar water pump station was capable of pumping 3000 gallons an hour (25 hp) at that latitude. After seven weeks of testing the plant was disassembled and shipped to Egypt for testing as an irrigation plant.

In 1973, Karl Böer of the University of Delaware built an experimental house called the Solar One, the first house to convert sunlight into energy.

Solar One, the first pilot solar power tower design was completed in 1981. The parabolic trough Solar Energy Generating Systems opened its first unit in 1984, the first major solar thermal plant in the world.

Selected list of plants

Looking north towards the Ivanpah Solar Power Facility's eastern boiler tower from Interstate 15 in California.

The U.S. pioneered solar tower and trough technologies. A number of different solar thermal technologies are in use in the U.S:

Mojave Solar Project near Harper Lake in California with parabolic troughs in their stow position

The rapidly falling price of PV solar had led to several projects being abandoned or converted to PV technology. Blythe Solar Power Project converted to a PV project, Rice Solar Energy Project was put on indefinite hold, Palen Solar Project tried to convert to PV but its permits were denied, Hidden Hills Solar Project was suspended in 2013 and later canceled. No major CSP plants remain under construction in the United States.

Solar photovoltaic power

The U.S. EIA projects U.S. solar generating capacity to increase more than tenfold between 2011 and 2040


In 2012, 3,313 megawatts of photovoltaics were installed, which amounts to a 76% growth over 2011's total installed base of 4,383 MW, which itself was a 73% increase over 2010's installed base of 2,528 MW. In 2013, total installations increased another 41%, adding 4,751 MW to reach a total of 12,100 MW.

Current trends indicate that a large number of photovoltaic power plants will be built in the south and southwest areas, where there is ample land in the sunny deserts of California, Nevada and Arizona. Large properties are being bought there with the aim of building more utility-scale PV power plants. In addition, many of the projects are on BLM public land.

Cell makers

New manufacturing facilities for solar cells and modules in Massachusetts, Michigan, New York, Ohio, Oregon, and Texas promise to add enough capacity to produce thousands of megawatts of solar devices per year within the next few years. Some of these include:

  • In late September 2008, Sanyo Electric Company, Ltd. announced its decision to build a manufacturing plant for solar ingots and wafers (the building blocks for silicon solar cells) in Salem, Oregon. The plant will begin operating in October 2009 and will reach its full production capacity of 70 megawatts (MW) of solar wafers per year by April 2010.
  • In early October 2008, First Solar, Inc. broke ground on an expansion of its Perrysburg, Ohio, planned to add enough capacity to produce another 57 MW per year of solar modules at the facility, bringing its total capacity to roughly 192 MW per year. The company expects to complete construction early next year and reach full production by mid-2010. And in mid-October 2008, SolarWorld AG opened a manufacturing plant in Hillsboro, Oregon, that is expected to produce 500 MW of solar cells per year when it reaches full production in 2011.
  • Rapidly decreasing photovoltaic prices put General Electric's planned factory in Colorado on hold, and led to the bankruptcy of Konarka Technologies, which had expected to produce 1,000 MW of solar modules per year by 2011, and Solyndra, which defaulted on a $535 million loan guarantee, prompting Republican members of the Energy and Commerce committee to vote to cease accepting new applications to the loan program.
  • HelioVolt Corporation opened a manufacturing facility in Austin, Texas that will have an initial capacity to produce 20 MW of solar cells per year. Starting with solar "inks" developed at DOE's National Renewable Energy Laboratory that are deposited with ink jets, HelioVolt employs a proprietary "printing" process to produce solar cells consisting of thin films of copper indium gallium selenide, or CIGS. The technology won an R&D 100 Award in 2008 and it earned an Editor's Choice Award for Most Revolutionary Technology. HelioVolt's "FASST" reactive transfer printing process is 10–100 times faster than other CIGS production processes and can also be combined with vacuum evaporation or ultrasonic spray deposition techniques. At its new Austin manufacturing plant, HelioVolt plans to produce both solar modules and next-generation building-integrated solar products using its FASST process.
  • In 2012 the U.S Department of Commerce placed a 31% tariff on solar cells made in China.
  • In September 2014, SolarCity broke ground on a solar panel manufacturing plant in Buffalo, New York. Upon its completion in 2016, it is estimated it will be the largest solar manufacturing facility in the Western hemisphere, with an annual manufacturing capacity of 1 gigawatt (GW).

Large-scale PV facilities

Solar array at Nellis Air Force Base. These panels track the sun in one axis. Credit: U.S. Air Force photo by Senior Airman Larry E. Reid Jr.

The ten largest solar PV plants in the U.S. are:

A total of 4,995 MW are operating as of March 6, 2014. Other operational PV power plants include:

Planned PV plants

Over 30 GW of utility-scale photovoltaic power plants were under development in the United States in 2015. The largest is the 2,700 MW Westlands Solar Park, in Kings County, California. The Blythe Solar Power Project is a 485 MW photovoltaic station under construction in Riverside County, California. The 300 MW Sonoran Solar Project in Arizona, is a photovoltaic solar power plant that is being planned by a subsidiary of NextEra Energy Resources. Secretary of the Interior Ken Salazar granted approval for the project in December 2011.

SolarStrong is SolarCity's five-year plan to build more than $1 billion in solar photovoltaic projects for privatized military housing communities across the United States. SolarCity plans to work with the country's leading privatized military housing developers to install, own and operate rooftop solar installations and provide solar electricity at a lower cost than utility power. SolarStrong is ultimately expected to create up to 300 megawatts of solar generation capacity that could provide power to as many as 120,000 military housing units, making it the largest residential photovoltaic project in American history. In November 2011, SolarCity and Bank of America Merrill Lynch announced that they have agreed to terms on financing for SolarStrong.

2012 priority proposals

In 2012, the Bureau of Land Management is giving priority status to 9 PV project proposals. The 750 MW McCoy Solar Project has been proposed by NextEra. The 100 MW Desert Harvest project has been proposed by enXco. The 664 Calico Solar Project has been redesigned by K Power. The 350 MW Silver State South and 350 MW Moapa project have been proposed. The 600 MW Mount Signal Solar Farm #1 has also been proposed.

Prior to 2012, in six southwestern states (Arizona, California, Colorado, Nevada, New Mexico, and Utah) the US Bureau of Land Management owned nearly 98 million acres (an area larger than the state of Montana) that was open to proposals for solar power installations. To streamline consideration of applications, the BLM produced a Programmatic Environmental Impact Statement (PEIS). By the subsequent Record of Decision in October 2012, the BLM withdrew 78 percent of its land from possible solar development, leaving 19 million acres still open to applications for solar installations, an area nearly as large as South Carolina. Of the area left open to solar proposals, the BLM has identified 285 thousand acres in 17 highly favorable areas it calls Solar Energy Zones.

  • Arizona
    • Brenda 3,865 acres (345 MW - 620 MW)
    • Gillespie 2,618 acres (233 MW - 419 MW)
  • California
    • Imperial East 5,717 acres (509 MW - 916 MW)
    • Riverside East 147,910 acres (18,035 MW - 32,463 MW)
  • Colorado
    • Antonito Southeast 9,712 acres (865 MW - 1,557 MW)
    • De Tilla Gulch 1,064 acres (135 MW - 243 MW)
    • Fourmile East 2,882 acres (345 MW - 621 MW)
    • Los Mogotes East 4,734 acres (526 MW - 947 MW)
  • Nevada
    • Amargosa Valley 8,479 acres (2,811 MW - 5,060 MW)
    • Dry Lake 5,717 acres (1,391 MW - 2,504 MW)
    • Dry Lake Valley North 25,069 acres (6,833 MW - 12,300 MW)
    • Gold Point 4,596 acres (428 MW - 770 MW)
    • Millers 16,534 acres (1,492 MW - 2,686 MW)
  • New Mexico
    • Afton 29,964 acres (6,900 MW - 12,400 MW)
  • Utah
    • Escalante Valley 6,533 acres (588 MW - 1,058 MW)
    • Milford Flats South 6,252 acres (576 MW - 1,037 MW)
    • Wah Wah Valley 5,873 acres (542 MW - 976 MW)

Total: 42,554 MW - 76,577 MW, depending on the technology used

Distributed generation

Within the cumulative PV capacity in the U.S., there has been growth in the distributed generation segment, which are all grid-connected PV installations in the residential and non-residential markets. Non-residential market includes installations on commercial, government, school and non-profit organization properties. Between 2000 and 2013 there had been 2,261 MW of residential solar and 4,051 MW non-residential solar installed. In 2013, there were 1,913 MW installed for these markets; the top 5 states were California, New Jersey, Massachusetts, Hawaii, and Arizona. The residential market had 60% annual growth in 2013. The growth contributing factors were new marketing strategies to partner with retailers to reach more customers, and new financial models including the securitization of residential solar assets. Non-residential PV had a slight growth of 4% in 2013 as the market was recovering from the oversupply in 2012. The future growth will likely come from New York, Arizona, and Colorado.

One of the largest residential solar projects was a 115 kilowatt system on a property in Southern California in 2011. There were many large scale non-residential installations. One of the largest rooftop installations for commercial properties was the 9 MW system of Holt Logistics refrigerated warehouse at the Gloucester Marine Terminal in New Jersey. One of the large scale PV installations in schools was the solar project of San Diego Unified School District with total of 48 sites and aggregated installed capacity of 9.17 MW.

Another type of distributed generation implemented by utility company is the world's first grid-connected pole-attached solar panels of Public Service Enterprise Group in New Jersey. More than 174,000 PV panels are mounted on utility poles along streets of New Jersey with aggregated capacity of 40 MW.


President Barack Obama addressed an audience of more than 450 people at the Nellis Solar Power Plant on May 27, 2009.

A complete list of incentives is maintained at the Database of State Incentives for Renewable Energy (DSIRE) (see external link).

Most are grid connected and use net metering laws to allow use of electricity in the evening that was generated during the daytime. New Jersey leads the nation with the least restrictive net metering law, while California leads in total number of homes which have solar panels installed. Many were installed because of the million solar roof initiative.


The federal tax credit for solar was extended for eight years as part of the financial bail out bill, H.R. 1424, until the end of 2016. It was estimated this will create 440,000 jobs, 28 gigawatts of solar power, and lead to a $300 billion market for solar panels. This estimate did not take into account the removal of the $2,000 cap on residential tax credits at the end of 2008.[needs update]

A 30% tax credit is available for residential and commercial installations. For 2009 through 2011 this was a 30% grant, not a tax credit, known as the 1603 grant program.

In late 2015, the federal government enacted a 5-year income tax credit for solar and wind power producers, phasing out from 30% for 2016-2019 to 10% in 2020. It is expected to add $38 billion of investment for 20 GigaWatts of solar.

Section 1603 grants

President Obama’s stimulus bill in 2009 created a program known as Section 1603 grants. The program was designed to give federal grants to solar companies for 30 percent of investments into solar energy. Since 2009, the federal government has given solar companies $25 billion in grant money through this program. The Section 1603 grant program expired in 2011.

The United States Treasury Department has been investigating solar companies for potential fraud since 2013. The department promised a report by June 2015, but a release of such a report has not yet occurred as of April 2016.

Congressional investigators, led by U.S. Senators Jeff Flake and Lisa Murkowski, wrote a letter in early March 2016 to the Inspector General’s office of the Treasury Department. The letter asked the office to give Congress an update on the investigations and cited the department’s own statements saying that Section 1603 applicants might have claimed $1.3 billion in “unwarranted cash grants.”

On June 9, 2016, Senator Orrin Hatch requested from Department of Treasury, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) details about how companies use Section 1603 grants and tax credits. In March 2016, Hatch asked the IRS and Treasury Department to demonstrate that the agencies use safeguards and coordinate with each other when reviewing applications for Section 1603 grants.

Solar America Initiative

Barack Obama looking at solar panels at the Denver Museum of Nature and Science, Feb. 17, 2009.

The United States Department of Energy (DOE) announced on September 29, 2008 that it will invest $17.6 million, subject to annual appropriations, in six company-led, early-stage photovoltaic (PV) projects under the Solar America Initiative's "PV Incubator" funding opportunity. The "PV Incubator" project is designed to fund prototype PV components and systems with the goal of moving them through the commercialization process by 2010. The 2008 award is the second funding opportunity released under the PV Incubator project. With the cost share from industry, which will be at least 20%, up to $35.4 million will be invested in these projects. The projects will run for 18 months, and will be subcontracted through DOE's National Renewable Energy Laboratory.

Most of the projects were to receive up to $3 million in funding, with the exception of Solasta and Spire Semiconductor, which would receive up to $2.6 million and $2.97 million, respectively. Massachusetts-based 1366 Technologies will develop a new cell architecture for low-cost, multi-crystalline silicon cells, which will enhance cell performance through improved light-trapping texturing and grooves for self-aligned metallization fingers. California's Innovalight will use ink-jet printing to transfer their "silicon ink" onto thin-crystalline silicon wafers to produce high-efficiency, low-cost solar cells and modules. Skyline Solar, also in California, will develop an integrated, lightweight, single-axis tracked system that reflects and concentrates sunlight over 10 times onto silicon cells. Solasta, in Massachusetts, is working on a novel cell design that increases currents and lowers the materials cost. Solexel, another California-based company, will commercialize a disruptive, 3D high-efficiency mono-crystalline silicon cell technology that dramatically reduces manufacturing cost per watt. Finally, Spire Semiconductor in New Hampshire will develop three-junction tandem solar cells that better optimize the optical properties of their device layers; the company is targeting cell efficiencies over 42% using a low-cost manufacturing method.

The PV Incubator project is part of the Solar America Initiative, which aims to make solar energy cost-competitive with conventional forms of electricity by 2015 (grid parity).

The U.S. Department of Energy Solar Energy Technology Program (SETP) will achieve the goals of the SAI through partnerships and strategic alliances by focusing primarily on four areas:

  • Market Transformation — activities that address marketplace barriers and offer the opportunity for market expansion
  • Device and Process Proof of Concept — R&D activities addressing novel devices or processes with potentially significant performance or cost advantages
  • Component Prototype and Pilot-Scale Production — R&D activities emphasizing development of prototype PV components or systems produced at pilot-scale with demonstrated cost, reliability, or performance advantages
  • System Development and Manufacturing — collaborative R&D activities among industry and university partners to develop and improve solar energy technologies

The Solar America Showcases activity is part of the Solar America Initiative (SAI), and preference is given to large-scale, highly visible, highly replicable installations that involve cutting-edge solar technologies or novel applications of solar.

SunShot Initiative

The SunShot Initiative was announced by the Department of Energy and aims to reduce the cost of solar power by 75% from 2010 to 2020. The name is based on "moon shot", Kennedy's target of reaching the moon within the decade.


  • Residential system prices reduced from $6/W to $1.50/W
  • Commercial system prices reduced from $5/W to $1.25/W
  • Utility-scale system prices reduced from $4/W to $1.00/W (CSP, CPV and PV)

The Energy Department on December 7 announced a $29 million investment in four projects that will help advance affordable, reliable clean energy for U.S. families and businesses. The $29 million would be separated into two investments:

  • $21 million investment over five years to design plug-and-play photovoltaic (PV) systems that can be purchased, installed, and operational in one day.
  • $8 million investment in two projects to help utilities and grid operators better forecast when, where, and how much solar power will be produced at U.S. solar energy plants.

Fraunhofer USA’s Center for Sustainable Energy Systems in Cambridge, Massachusetts, will develop PV technologies that allow homeowners to easily select the right solar system for their house and install, wire and connect to the grid.

North Carolina State University will lead a project to create standard PV components and system designs that can adapt simply to any residential roof and can be installed and connected to the grid quickly and efficiently.

IBM Thomas J. Watson Research Center in Armonk, New York, will lead a new project based on the Watson computer system that uses big data processing and self-adjusting algorithms to integrate different prediction models and learning technologies.

These projects are working with the Energy Department and the National Oceanic and Atmospheric Association to improve the accuracy of solar forecasts and share the results of this work with industry and academia.

State and local

The 104kW solar highway along the interchange of Interstate 5 and Interstate 205 near Tualatin, Oregon in December 2008.
  • Governor Jerry Brown has signed legislation requiring California's utilities to get 33 percent of their electricity from renewable energy sources by the end of 2020.
  • The San Francisco Board of Supervisors passed solar incentives of up to $6,000 for homeowners and up to $10,000 for businesses. Applications for the program began on July 1, 2008. in April 2016, they passed a law requiring all new buildings below 10 stories to have rooftop solar panels, making it the first major US city to do so
  • In 2008, Berkeley initiated a revolutionary pilot program where homeowners are able to add the cost of solar panels to their property tax assessment, and pay for them out of their electricity cost savings. In 2009, more than a dozen states passed legislation allowing property tax financing. In all, 27 states offer loans for solar projects (though after the conclusion of the pilot program, due to issues with Fannie Mae and Freddie Mac, Berkeley no longer offers this financing mechanism).
  • The California Solar Initiative has set a goal to create 3,000 megawatts of new, solar-produced electricity by 2016.
  • New Hampshire has a $3,750 residential rebate program for up to 50% of system cost for systems less than 5 kWp ($6,000 from July 1, 2008 until 2010).
  • Louisiana has a 50 per cent tax credit up to $12,500 for the installation of a wind or solar system.

Feed-in Tariff

Experience has demonstrated that a feed-in tariff is both the least expensive and the most effective means of developing solar power. Investors need certainty, which they receive from a feed-in tariff. California enacted a feed-in tariff which began on February 14, 2008. Washington state has a feed-in tariff of 15 ¢/kWh which increases to 54 ¢/kWh if components are manufactured in the state. Hawaii, Michigan, and Vermont also have feed in tariffs.

In 2010, the Federal Energy Regulatory Commission (FERC) ruled that states were able to implement above-market feed-in tariffs for specific technologies.

Solar Renewable Energy Certificates

In recent years, states that have passed Renewable Portfolio Standard (RPS) or Renewable Electricity Standard (RES) laws have relied on the use of Solar renewable energy certificates (SRECs) to meet state requirements. This is done by adding a specific solar carve-out to the state Renewable Portfolio Standard (RPS). The first SREC program was implemented in 2005 by the state of New Jersey and has since expanded to several other states, including Maryland, Delaware, Pennsylvania, Ohio, Massachusetts, North Carolina and Pennsylvania.

An SREC program is an alternative to the feed-in tariff model popular in Europe. The key difference between the two models is the market-based mechanism that drives the value of the SRECs, and therefore the value of the subsidy for solar. In a feed-in tariff model, the government sets the value for the electricity produced by a solar facility. If the level is higher, more solar power is built and the program is more costly. If the feed-in tariff is set lower, less solar power is built and the program is ineffective. The problem with SRECs is a lack of certainty for investors. A feed-in tariff provides a known return on investment, while an SREC program provides a possible return on investment.

Power Purchase Agreement

In 2006 investors began offering free solar panel installation in return for a 25-year contract, or Power Purchase Agreement, to purchase electricity at a fixed price, normally set at or below current electric rates. By 2009 over 90% of commercial photovoltaics installed in the United States were installed using a power purchase agreement. Approximately 90% of the photovoltaics installed in the United States is in states that specifically address power purchase agreements.

New construction mandates

In March 2013, Lancaster California became the first U.S. city to mandate the inclusion of solar panels on new homes, requiring that "every new housing development must average 1 kilowatt per house."


Main article: PACE financing

An innovative financing arrangement pioneered in Berkeley, California, and Palm Springs, lends money to a homeowner for a solar system, to be repaid via an additional tax assessment on the property for 20 years. This allows installation of the solar system at "relatively little up-front cost to the property owner." Now known as PACE, for Property Assessed Clean Energy, it is available in 28 states. Freddie Mac and Fannie Mae have objected to the repayment of solar loans being senior to mortgage loans, and some states have relegated PACE loans to junior loans. HR 2599 was introduced to prevent interference with the PACE program by other lenders. The principle feature of the program is that the balance of the loan is transferred to the new owners in the event the property is sold, and the loan is paid for entirely through electric bill savings. Unlike a mortgage loan, no funds are transferred when the property is sold - only the repayment obligation is transferred.

PACE programs are currently operating in eight states, California, Colorado, Florida, Maine, Michigan, Missouri, New York, and Wisconsin, and are on hold in many others, pending resolution of the Freddie Mac, Fannie Mae objection.


Average monthly capacity factors for electricity generation by utility-scale solar plants, 2011-2014 (data from U.S. Energy Information Administration)

In the United States, 2,106 MW of PV was installed in the 4th quarter and 4,751 MW of PV installations were completed in 2013. Abengoa's 280 MWac of CSP project was brought online in the 3rd quarter and Genesis Solar's first phase of 125 MWac was brought online in the 4th quarter of 2013 bringing the total to 410 MWac for the year and 918 MWac total. Ivanpah is already completed during the first quarter of 2014 the current world's largest CSP power plant is 392 MWac and brings the total to 1310 MWac. The 110 MWac Crescent Dunes project started commissioning during February. The 250 MWac Mojave solar, second phase 125 MWac Genesis Solar, and Tooele Army Depot Solar's 1.5 MWac power plant are all expected to come online in 2014. The A total of around 9.5 GW of solar PV and CSP capacity is expected to come on-line in 2016, more than any other source.

The amount of electricity a unit is capable of producing over an extended period of time is determined by multiplying the capacity by the capacity factor. The capacity factor for solar photovoltaic units is largely a function of climate and latitude. The National Renewable Energy Laboratory has calculated that the highest statewide average solar voltaic capacity factors are in Arizona, New Mexico, and Nevada (each 26.3 percent), and the lowest is Alaska (10.5 percent). The lowest statewide average capacity factor in the contiguous 48 states is in West Virginia (17.2 percent).