Residential Solar Market Analysis US - Size and Forecast 2024-2028

US Residential Solar Market Size 2024-2028

The US Residential Solar Market size is forecast to increase by USD 7.87 billion and is estimated to grow at a CAGR of 10.16% between 2023 and 2028.  The market in the US experiences growth driven by critical factors shaping the renewable energy landscape. With increasing investments in renewable energy, there's a heightened emphasis on solar power adoption among residential consumers. Moreover, favorable government regulations and incentives incentivize homeowners to invest in solar PV installations, promoting sustainable energy solutions. Additionally, the rising number of solar PV installations reflects the growing consumer interest in reducing carbon footprints and achieving energy independence. This dynamic market landscape underscores the pivotal role of residential solar solutions in advancing the transition towards clean and sustainable energy sources in the US. This market research and growth report includes an in-depth analysis of key market drivers, trends, and challenges during the forecast period.

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Market Segmentation

Technology Segments

The crystalline silicon segment is estimated to witness significant growth during the forecast period. There is an increasing adoption of crystalline silicon PV systems segment as solar PVs across the US. The main components of this PV system are built using crystalline silicon (c-Si) solar cells, which are highly stable. The main factor that is fuelling the adoption of this segment as solar PV in residential applications is due to its high-efficiency ratings and reliability of the cells.

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There is an increasing R&D and development initiatives which is resulting in the availability of technologically advanced systems. For example,  DOE supports c-Si photovoltaic (PV) R&D efforts that result in market-ready technologies. Current DOE research efforts focus on innovative ways to minimize costs. Furthermore, there is significant research and development taking place on minimizing raw material requirements which include pioneering ultra-thin c-Si absorber layers, developing kerf-free wafer production techniques, and optimizing growth processes. Additionally, the strong presence of prominent market players in the country is expected to fuel the growth of this segment in the future. Hence, such factors are fuelling the growth of this segment which, in turn, will drive the market growth during the forecast period.

Market Dynamics and Customer Landscape

The market is witnessing significant growth due to rising electricity costs and increasing climate change risks. Households are turning to solar energy as a cost-effective and eco-friendly alternative to traditional energy sources. The availability of sunlight and the advancement of non-chemical solar technology make solar energy an attractive option for households. Rapid industrialization and urbanization have led to a surge in energy consumption, making renewable energy deployment a priority. Net metering schemes and tax benefits encourage homeowners to invest in Solar PV systems and Grid-connected systems. Battery storage systems enable households to store excess solar energy for use during peak hours or power outages. Fossil fuel reserves are depleting, making renewable sources such as solar and wind power generation increasingly important. Innovations in solar technology, such as floating panels, offer solutions for energy production in water-rich areas. The Solar tax credit also incentivizes homeowners to invest in solar energy systems. In conclusion, the residential solar market is poised for growth as households seek to reduce their carbon footprint and save on energy costs. Solar PV systems, Grid-connected systems, and battery storage systems are key equipment driving this market. The future of residential energy consumption lies in renewable sources, and solar energy is leading the charge.

Key Market Driver

One of the key factors driving the market growth is the increasing investments in renewable energy.  The United States is witnessing a surge in renewable energy technologies, driven by factors such as government policies promoting wind power generation and rooftop solar projects. This surge is also attributed to the competitive cost of production and the low carbon emissions associated with renewable sources. Despite the economic uncertainties posed by the pandemic, financial institutions and renewable energy development companies are actively investing in renewable energy, buoyed by incentives such as feed-in tariff (FIT) programs and tax benefits.

These investments are anticipated to have a positive impact on the market. Notably, in May 2020, the US surpassed China as one of the most attractive countries for renewables investment. Additionally, major corporations like Amazon are making significant commitments to these projects, with plans to supply 6.5 gigawatts (GW) of electricity from solar PV systems and wind power generation. This scale of investment is expected to drive growth in the market during the forecast period.

Significant Market Trends 

A key factor shaping the market growth is the residential energy storage as virtual power plants. There is an increasing adoption of PV due to the decrease in solar power prices, which has resulted in a continuous increase in the number of installations in the residential and commercial sectors. Some of the major factors that influence the power output of solar PV include solar irradiation of the region, the efficiency of the panel, and the degree of shading that varies depending on the time of day and the amount of cloud covering the region.

Therefore, PV is combined with battery energy storage systems in order to overcome the issue of intermittency of solar power and have reliable, cheaper, and cleaner renewable power. In this setup, both systems complement each other to provide uninterrupted power. Hence, such factors are positively impacting the market which in turn will drive the market growth during the forecast period.

Major Market Challenge

The availability of alternative technologies is one of the key challenges hindering market growth. There is significant competition for residential solar systems with well-established power sources, including diesel generators and upcoming technologies, such as fuel cells that are cleaner and have higher efficiency. Hence, it can pose a significant threat to the market.

Moreover, there is a significant challenge due to the advent of newer technologies such as fuel cells which can efficiently function as a standalone system to offer power as well as heat without requiring to be charged by solar or wind power. Furthermore, the main advantage of fuel cells is that it has higher efficiency and higher energy density when compared to batteries making them suitable for residential applications. Hence, such factors are negatively impacting the market. Therefore, it is expected to hinder the market growth during the forecast period.

Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Residential Solar-Market in US Customer Landscape

Major Market Companies

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

AUXIN SOLAR Inc: The company offers residential solar-equipment such as high-efficiency solar panels for eco-friendly power generation.

The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• BrightSource-Energy Inc.
• Canadian-Solar Inc.
• Emeren
• Enphase-Energy Inc.
• Hanwha Corp.
• JA Solar-Technology Co. Ltd.
• JinkoSolar Holding Co. Ltd.
• LG Corp.
• Panasonic Holdings Corp.
• Schneider Electric SE
• Silfab-Solar Inc.
• SPI-Energy Co. Ltd.
• Sunnova-Energy International Inc.
• Sunrun Inc.
• Tesla Inc.
• TotalEnergies SE
• Trina Solar-Co. Ltd.
• Trinity Heating and Air Inc
• Yaskawa Electric Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

Rooftop solar projects have gained significant traction in the residential market due to escalating electricity costs and increasing climate change risk. The EU rooftop PV market, in particular, is witnessing substantial growth as commercial buildings and new residential buildings adopt this clean and renewable energy source. Photovoltaic cells, the non-chemical technology at the heart of solar energy generation, harness the power of sunlight to produce electricity. Rapid industrialization and urbanization have led to a surge in energy consumption, making renewable energy deployment a favorable industry scenario. Net metering schemes and power purchase agreements enable homeowners to sell excess solar energy back to the grid, enhancing the cost efficiency of rooftop solar installations. Government schemes, incentives, tariffs, auctions, tax exemptions, and regulatory reforms are crucial drivers for the residential solar market. These initiatives promote the adoption of solar PV installations, making them increasingly competitive with traditional energy sources. Moreover, the durability, low maintenance, zero noise pollution, and cost efficiency of solar PV systems make them an attractive option for households seeking to reduce their carbon footprint and save on energy bills. The integration of renewable energy into the grid network, including microgrids and large-scale renewable integration, is essential for ensuring a reliable and sustainable energy supply. In conclusion, the residential solar market is poised for growth due to the increasing importance of renewable energy, favorable government policies, and the numerous benefits of solar PV systems. With advancements in technology and the ongoing shift towards a more sustainable energy future, solar energy is set to become an integral part of household energy consumption.

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Segment Overview

The market report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments

• Technology Outlook 
  • Crystalline silicon
  • Thin-film
• Location Outlook
  • California
  • Florida
  • Arizona
  • Rest of US

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the size of the market size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis industry across the US
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of market companies

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