Source: ; Agua Caliente Solar Project

Not all solar producers are created equal. While the Joneses might've just installed a shiny solar panel kit on their roof, they're not helping solar soar. Here's what you need to know.

Solar scale-up
Currently, solar energy accounts for less than 1% of America's total energy capacity. But while its generation is dwarfed in comparison to coal-fired, natural gas, or nuclear power plants, utilities are increasingly looking to solar for new generation opportunities.

The Solar Energy Industry Association, or SEIA, releases quarterly market insight reports, and utilities have continually taken the solar cake. In its latest Q2 report, the SEIA reported that although commercial installations fell nationwide, utility installations more than doubled from Q1 to Q2. In fact, utilities installed more solar this past quarter than ever before, with 20 overall projects clocking in at a combined 447 megawatts.

Big solar projects aren't just adding to growth -- they are the growth. If utilities hadn't installed anything this past quarter, total installations would've dropped a substantial 18% -- a huge blow to the solar growth story. Instead, installations soared 45% to 1,133 megawatts for the quarter, helped along by several sizable projects.

In particular, NRG Energy's (NYSE:NRG) 290 megawatt Agua Caliente project is the world's largest solar project ever. Located in Arizona, the 5.2 million module system can power up to 100,000 homes. Solar construction companies like Agua Caliente's First Solar (NASDAQ:FSLR) are continually dropping costs, making acquisitions more affordable than ever for utilities eyeing alternative energy.

Go big or go home?

Source: SolarCity Corporation 

Residential solar has a role to play -- but at least for now, it's still a small one. SolarCity Corporation (NASDAQ:SCTY.DL) has championed household solar panel kits, but its prolific installations just don't add up to the same energy.

SolarCity CEO Lyndon Rive has publicly set a goal for his company of one million solar panel kits installed by 2018. That may seem impactful, but it ends up equating to just around 6,000 megawatts. That's less than total expected solar installations for 2014, and equivalent to only a quarter of utilities' current proposed or under construction solar projects.

Why utilities want solar
Utilities are relatively recent arrivals to the solar spectrum. A combination of tax credits, state renewable energy standards, and a dramatic dive in costs have all helped utilities consider the solar switch. As with the United States, no utility sports double-digit percentages of solar generating capacity, but it seems everyone's eager to add something.

Just this week, Dominion Resources, Inc (NYSE:D) announced new plans to acquire two new California solar farms totaling 42 megawatts, bringing its total solar stake to 274 megawatts. David Christian, CEO of Dominion's Generation business, noted that, "These planned acquisitions would increase our renewable energy generation and align with our portfolio of regulated and long-term contracted assets. We are working to identify additional solar projects to boost Dominion's renewable energy portfolio and support our long-term growth plan."

Not only do the two projects qualify for the federal Investment Tax Credit, but their energy is already sold off at guaranteed prices for the next 25 years via power purchase agreements, a common practice in the solar industry.

For Dominion and other utilities, solar simply makes sense. It increases the utility's own energy diversity, cuts down on tax burdens, ensures a steady stream of long-term sales, and keeps the company in line with any present or future renewable energy standards. Household solar panel kits have their place, but utilities are the ones making major moves.

Justin Loiseau has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources and SolarCity. The Motley Fool owns shares of NRG Energy and SolarCity. 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.