Solar energy was the single biggest source of new electricity capacity in the United States in 2016 and now makes up over 1% of all electricity generated in the country. And with solar energy now cost-competitive with coal, natural gas, and nuclear in most of the country, the industry is primed for growth in the next decade. 

What's surprising is where all of this solar is being installed. Sure, California is a big solar state, but when you look at the top five solar states per capita, there are some surprisingly solar-friendly states in the nation. The five states with the most solar per capita are Nevada, Utah, Hawaii, California, and Arizona.  

First Solar utility scale solar farm shown with the sun in the background.

Utility-scale solar farms are the biggest source of solar energy in the U.S. Image source: First Solar.

Nevada takes the top solar spot

California is by far the biggest solar state, with 18,296 MW of solar capacity having been installed through the end of 2016, according to the Solar Energy Industries Association, enough to power 3 million homes. But it's not the top solar state per capita. 

Nevada actually has the most solar relative to its population, with 745 watts per capita, or nearly three solar panels per person. At peak sunlight, that's enough to power 67 high-efficiency LED light bulbs. Most of the solar power isn't on residents' rooftops; it's instead in large utility-scale power plants in the Nevada desert. For example, SunPower (NASDAQ:SPWR) has built 150 MW at the Boulder City 1 and 2 power plants, and First Solar (NASDAQ:FSLR) has built the 250 MW Moapa Solar Project near Las Vegas. With plenty of solar resources and the ability to export energy into Southern California's energy market, Nevada will probably remain near the top of the solar per capita list for years to come. 

A hiker stands underneath Jacob Hamblin Arch in Coyote Gulch, Grand Staircase-Escalante National Monument, Utah, United States

Jacob Hamblin Arch
in Coyote Gulch, Grand Staircase-Escalante National Monument, Utah. Image source: Getty Images.

 

Utah's surprisingly sunny energy mix

Second on the list is Utah, with 488 watts per capita, a surprisingly high level for a state that gets very little national attention in solar. And its 1,489 MW of total solar installations will power 292,000 homes, or 40% of all homes in the state. Utah is also the home of Vivint Solar (NYSE:VSLR), one of the biggest residential solar installers in the country, and with lots of solar resources on the southern side of the state, the industry has a bright future there. 

Image showing the aerial view of spectacular Na Pali coast of Kauai island, including mountains and sea.

Aerial view of spectacular Na Pali coast, Kauai. Image source: Getty Images.

Hawaii takes solar energy very seriously

Hawaii is third, with 472 watts of solar per capita, and if you've visited the state recently, this is no surprise. Rooftop solar is commonplace, and now islands such as Kauai are pushing toward 100% renewables.

Tesla (NASDAQ:TSLA) has built a solar-plus-storage plant on Kauai, and AES Corporation (NYSE:AES) recently signed a deal to build 28 MW of solar and 100 MWh of energy storage for just $0.11 per kWh, less than the average retail price of electricity in the continental United States. And with Hawaii's electricity costs about triple the national average --because it burns oil for most electricity -- this is a state that could be No. 1 in solar per capita very soon. 

Image showing Bixby Creek Bridge on Highway One on a sunny day.

Bixby Creek Bridge on Highway One, California. Image source: Getty Images.

California is just scratching the surface of its solar potential

California is fourth in the country, with 466 watts of solar per capita. It's home to a large number of utility-scale solar projects and is the No. 1 state for rooftop solar as well. California has been more aggressive than most states in adopting policies both to drive solar growth and to provide fair compensation for all consumers, with time-of-use rates for residents having become a renewable portfolio standard that drove utility installations over the last decade. Its sheer size may make it hard for it to become first in per capita rankings, but this will be the biggest state for solar overall for a long time. 

Image of the road to Superstition Mountain in Arizona.

Road to Superstition Mountain, Arizona. Image source: Getty Images.

Arizona's love-hate relationship with solar energy

Arizona is the fifth-highest solar state per capita, at 430 watts. The state has been home of some of the biggest fights in residential solar, with utility APS opposing net metering vigorously. But large projects such as First Solar's 290 MW Agua Caliente project are still going up, and it's hard to fight the low cost of solar in the state. And with abundant solar resources, Arizona should be a big solar state in the future. 

Aerial Central Texas Solar Energy Farm showing thousands of collectors.

Solar Energy Farm in Texas. Image source: Getty.

Lots of surprising states are going solar 

If you're into solar energy, there are some surprising states to keep an eye on beyond these top five. North Carolina is the No. 2 solar state in the country by cumulative amount of solar capacity installed through 2016, with 3,016 MW of solar, a surprise for a state that hasn't typically been seen as solar-friendly. Georgia and Texas are Nos. 8 and 9 nationally, with 1,432 MW and 1,215 MW, respectively, but both have abundant solar resources and should move up the list. 

What's certain is that with solar energy now competitive with fossil fuels for utilities, commercial users, and homeowners across the country, the amount of solar energy per capita will only grow in the future. 

Travis Hoium owns shares of First Solar and SunPower. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.