Solar energy in the United States is booming. Together with our partners from Wood Mackenzie Power & Renewables and The Solar Foundation, SEIA tracks solar industry trends and trajectories that demonstrate the diverse and sustained growth of solar energy across the country. In the past decade alone, solar energy has experienced an average annual growth rate of 33%. Thanks to strong federal policies, such as the tax credit for investment in solar energy, the rapid decline in costs, and the growing demand for clean electricity in the public and private sectors, there are now more than 130.9 gigawatts (GW) of solar capacity installed across the country, enough to supply 23 million homes.
The commercial solar market, which consists of on-site solar installations for businesses, non-profit organizations and governments, has grown unevenly over the past few years, as the industry continues to unlock the funding tools needed to provide access to a wide range of types of companies. However, the increasing adoption by commercial, non-profit and public entities with clean energy objectives bodes well for the future growth of this segment. With just over 1% of commercial electricity demand met by on-site solar energy, there are still significant opportunities for growth. While the initial growth of community solar installations was mainly driven by three key markets (New York, Minnesota and Massachusetts), the growing list of states with community solar programs has helped diversify the market and has created major oil pipelines that will materialize in the coming years.
The continued growth of state community solar programs and improvements in state and regional interconnection processes are essential to ensure access to solar energy for all types of homeowners and businesses. The passage of the Inflation Reduction Act has dramatically improved the benchmark projections for the solar industry for the next five years. Over the next half-decade, the IRA's long-term tax incentives and manufacturing provisions provide the market certainty needed to boost expected solar deployment by more than 40% compared to pre-IRA projections. While supply chain issues limit the impact of IRA in the short term, its approval creates enormous growth potential as a new manufacturing capacity comes into operation and other supply barriers are addressed.
You can explore the SEIA Solar Means Business report, which includes interactive maps and data tools on the main corporate users of solar energy in the U.S. UU. In addition, demand for copper, indium and gallium serenades is expected to increase during the smelting period, due to the increase in cost-effective solar panels. In addition, the decline in the profitability of market participation and the stress of module manufacturers cause a fall in the prices of solar panels.
In addition, changes in the prices of silver, which is a key raw material for solar modules, drive demand for solar panel installations and contribute to the growth of the solar energy market. Commercial photovoltaic solar panels have a lifespan of 15 to 20 years and can be used to power industrial buildings in remote locations or remote from the grid, preheat ventilation air and heat water in offices, businesses and others. Increasing awareness among people about the use of low-carbon technologies to limit their carbon footprint is one of the main factors driving the adoption of photovoltaic solar energy systems in the commercial, industrial and residential sectors. The deployment of large-scale storage systems to protect against energy changes at peak demand has led to the adoption of large rooftop photovoltaic solar systems to store the desired energy in batteries.
Based on technology, the market for photovoltaic solar panels has been segmented into thin film, crystalline silicon and others. Solar energy is the most readily available source of electricity, which, in turn, can boost its adoption in areas without a grid connection. The increasing use of solar panels in the European region, especially in countries such as Spain and Italy, whose strategic geographical location exposes them to the maximum amount of sunlight throughout the year, is expected to boost the market. While the cost of solar photovoltaic electricity has dropped substantially, it is still essential to further decrease to make this technology affordable for all.
In North America, energy generation from solar cells in the industrial sector has increased over the years as more efficient solar cells are on the market. With the growth in demand for photovoltaic installations, the adoption of the warehouse network is expected to increase, encouraging the demand for lithium-ion batteries for solar energy stores and increasing the growth of the solar energy market. The utility market is also recognizing the advantages of combining solar energy with storage, as more than 45 GW of commissioned or announced projects are combined with storage, representing more than 50 GWh of storage capacity. A combination of private sector innovation and stable long-term public policy will guide the solar industry towards achieving these more aggressive objectives to address climate change and decarbonize the economy.