The solar energy industry has experienced rapid growth over the past decade.
Solar energyin 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. .
The demand for solar cells has gained great momentum due to the increase in photovoltaic installations on roofs, followed by the increase in applications in the architecture sector. 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. An inadequate power grid has increased demand for solar energy in remote areas of Africa and Latin America.
Solar energy is a powerful source of energy that can be used to heat, cool and illuminate homes and businesses. The amorphous silicon cell segment is expected to experience maximum growth due to the increase in installations and the use of solar panels. Companies and industry use solar technologies to diversify their energy sources, improve efficiency and save money. Competition has increased significantly among manufacturers with the development of photovoltaic-based energy distribution systems.
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. In addition, North America and Europe have largely focused on research to maximize solar potential. Companies such as Apple, Amazon, Walmart, Target and Google are investing in solar and renewable energy at an incredible rate. In addition, the agriculture segment (26%) of horticulture is also experiencing an increase in demand for solar panels for better production of arable crops.