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. Recently, Fotowatio Renewable Ventures, the Arab provider of clean and renewable energy solutions, announced its plans to withdraw its property from Indian solar space. In a regulated tariff model, the government sets the value of the electricity produced by a solar installation.
Demand for solar panels has increased in the agricultural and architectural sector, creating growth opportunities for the solar energy market. New Jersey leads the country with the least restrictive net metering law, and California leads the total number of homes with solar panels installed. The expansion of its plant in Perrysburg, Ohio, began with the objective of adding enough capacity to produce another 57 MW per year of solar modules at the plant, bringing its total capacity to about 192 MW per year. In addition, the agriculture segment (26%) of horticulture is also experiencing an increase in demand for solar panels for better production of arable crops.
Emerging economies, such as China and Japan, have significantly increased the production of solar technologies due to government tariffs and merger (26%), the acquisition of local manufacturers. Favorable regulations, renewable energy targets and a growing number of solar parks are the key factors driving market growth. The program was designed to provide federal grants to solar energy companies for 30 percent of solar energy investments. The fixed costs of solar energy are still much higher than those of other developed solar markets around the world.
In addition, the fluctuation in the price of silver, which is one of the main raw materials for solar modules, drives demand for solar panel installations and contributes to the growth of the solar energy market. An executive order in June suspended solar tariffs until 2024, allowing manufacturers to resume module shipments after requests for circumvention threatened to impose high tariffs on imports from Southeast Asia. The capacity factor of photovoltaic solar units depends largely on climate and latitude, so it varies significantly from state to state. For the fifth consecutive quarter, prices have increased year after year in all market segments, making the prices of solar energy at the utility scale 12.7% higher than a year ago.
Demand for continuous and sustainable electricity supply is likely to fuel demand for solar photovoltaic energy technologies. Companies such as Apple, Amazon, Walmart, Target and Google are investing in solar and renewable energy at an incredible rate. . .