U.S. Residential Solar PV Market (By Construction: Retrofit, New Construction) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2022-2030

The U.S. residential solar PV market size was estimated at around USD 9.5 billion in 2021 and it is projected to hit around USD 15.6 billion by 2030, growing at a CAGR of 5.67% from 2022 to 2030

Factors such as rising demand for renewable clean power generation and government policies related to incentives and tax rebates for solar PV (photovoltaic) systems are expected to drive the market over the forecast period. Increasing awareness among people regarding the use of low carbon-intensive technologies to limit carbon footprint is one of the major factors driving the adoption of solar PV systems in the U.S. residential sector.

The rejoining of the U.S. in the Paris Climate Agreement in February 2021 is expected to further boost market growth. Further, the extension of Investment Tax Credit (ITC) for residential solar PV installations at 26% by 2022 and 22% by 2023, is anticipated to boost the growth of the industry over the forecast period.

California is expected to continue to have a dominating market share as compared to other states in the U.S. on account of the presence of supporting policies, plans, and financial incentives for solar PV installation in the residential sector. In addition, the adoption of the California solar mandate from January 2021 is expected to boost market growth in the state over the coming years. The mandate states that all new residential properties to be constructed in the state should opt for solar PV systems.

The availability of alternative clean power generation technologies in form of wind power and fuel cell systems is expected to hinder the growth of the market. Increase in research and development activities and the presence of favorable policies and regulations for these power generation sources are factors likely to boost their adoption over the forecast period. These factors are expected to limit the growth of the industry over the forecast period. 

Scope of The Report

Construction Insights

The retrofit construction segment dominated the market and accounted for the largest revenue share of 72.76% in 2021. 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.

State Insights

California dominated the U.S. residential solar PV market and accounted for the largest revenue share of 33.3% in 2021. 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.

Key Players

• Tesla
• SunPower Corporation
• Sunrun
• Trinity Solar Inc.
• Sungevity
• Momentum Solar
• Petersen Dean Inc.
• ACE Solar
• Sunlux
• Titan Solar Power

Market Segmentation

• By Construction Outlook 

• Retrofit
• New Construction
• By State Outlook 
• California
• New York
• Arizona
• New Jersey
• Massachusetts
• Texas
• Rest of the U.S.