Solar energy accounted for 100% of new power generation built in the U.S. in the month of March. Over 44 MW of solar capacity from seven projects in California, Nevada, New Jersey, Hawaii, Arizona, and North Carolina were added to the grid last month, and that doesn't include distributed solar, which goes on commercial and residential rooftops. Those sources likely added dozens of MW to the grid as well.
One month can be an aberration in new power generation, but the trend of solar accounting for a large percentage of new generation is unmistakable. According to FERC, about 30% of utility-scale capacity added in the first quarter came from solar. Again, this doesn't account for distributed solar so it's possible that solar accounted for around 50% of total electricity capacity added so far in 2013.
The companies making it happen
When you talk about building utility-scale projects there are two major contributors, First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR). Both companies are currently constructing projects that are hundreds of MW in size, accounting for a majority of the new generation in the U.S. right now.
While utility-scale solar is hot right now its future may not be as bright. The projects being built right now were contracted years ago and utilities don't have the appetite for more of them. Today, distributed solar is where we can find consistent growth.
SunPower is a big player in distributed solar through its lease program and high-efficiency modules, but SolarCity (NASDAQ:SCTY) is the largest installer in the country. The company is yet to be profitable but it is building a large network of installations that pay predictable cash flows month after month. Eventually, this should lead to a highly profitable business for investors.
Foolish bottom line
Solar power is a growing piece of our energy pie and investors who play it right can make a lot of money during its growth trend.
Motley Fool contributor Travis Hoium manages an account that owns shares of SunPower. Travis Hoium personally owns shares of SunPower and has the following options: Long Jan 2015 $7 Calls on SunPower, Long Jan 2015 $5 Calls on SunPower, and Long Jan 2015 $15 Calls on SunPower. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.