U.S. solar installations grew an incredible 76% last year on the back of rapidly falling costs and growing capabilities by solar installers. The usual suspects, including California and Arizona, dominated much of the 3.3 GW of solar installed last year, but there are a few surprising states picking up their interest in solar.
Some states are driven by subsidies, some are driven by sun, and some are driven by the high cost of traditional electricity. So where does your state stand?
The usual suspects
It's not surprising that California and Arizona top the list for U.S. solar installations. Both states are very sunny, and in the southern portion of the country they don't have the same daylight swings as northern states.
Most solar going up in both states is the utility-scale variety, which makes for rapid expansion. Solar powerhouses First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) are turning large swaths of desert into power-generating assets in both states. First Solar is building the Desert Sunlight (550 MW) and Topaz Solar Farm (550 MW) in California and Agua Caliente (290 MW) in Arizona, while SunPower is building the 250 MW California Valley Solar Ranch in California (shown below).
All told, California installed 1.03 GW of solar last year and Arizona installed 710 MW. The biggest difference between the states is in residential where 76 MW of California's solar was installed on 626,000 homes and Arizona only installed solar on about 139,000 homes.
An abundance of sun and relatively high-energy prices in California have driven installations, but there are some surprising states investing in solar as well.
East Coast solar is booming
It may shock you to find out that New Jersey is the third biggest solar-installing state. High electricity costs help make solar cost effective, but it's a renewable-energy requirement that has helped push the state into the top three. New Jersey utilities are required to get 20% of their energy from renewable sources by 2020, and those who install solar can sell credits for the energy they produce.
New Jersey installed 414.9 MW last year, and with continued political support that should grow again in 2013. Flanking New Jersey in the East Coast market is North Carolina and Massachusetts, which installed 131.9 MW and 128.9 MW, respectively. Part of the growth in North Carolina was actually from a 20 MW installation at Apple's data center in the state.
The top 10
The rest of the top 10 solar states includes Hawaii, where solar is driven by ultra-high electricity prices, and Texas, where the industry may have the most potential because of abundant solar resources.
- California: 1,032.7 MW
- Arizona: 710.3 MW
- New Jersey: 414.0 MW
- Nevada: 198 MW
- North Carolina: 131.9 MW
- Massachusetts: 128.9 MW
- Hawaii: 108.7 MW
- Maryland: 74.3 MW
- Colorado: 69.9 MW
- Texas: 64.1 MW
As the industry grows, the installations will rise, and it will be interesting to see who leads solar going forward.
What's driving the future of solar?
The huge installation numbers last year were driven by First Solar and SunPower, but these utility-scale projects aren't the future of solar. This year, we'll see a transition to residential solar, where SolarCity is a major player and SunPower is starting to gain traction as well. As more residential and commercial solar is installed, the cost will come down, because companies become more efficient and the leading states will change. California, Hawaii, and New York will be states to watch in residential solar this year, because they have high energy costs and are perfect for residential solar.
How does your state fare in solar and what does the future look like? Tell us your thoughts in the comments below.
Fool contributor Travis Hoium owns shares of Apple and SunPower and also has long January 2015 $5, $7, $15, and $25 calls on SunPower. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.