Solar usage in the USA

Oct 2, 2020

Solar usage in the USA

Updated May 2021

Solar usage in the USA is rapidly becoming cheaper and growing increasingly faster.

In 2004, the average price of an installed 10 kilowatt rooftop solar module was about US$3.50 per watt. As of early 2021 an installed 10 kilowatt system is likely to ranges from $17,750 to $24,000 ($1.77 -$2.40 per watt).

How does system size impact the cost of solar?

Knowing the average cost per watt is helpful, but what does $1.77-$2.40 per watt actually mean for you? The cost of installing solar depends primarily on how much electricity you want to generate – a bigger system will cost more because you’ll need to buy more equipment and more labour will be needed to install it.

Solar usage in the USA – higher solar cell efficiency

This fall in price is due mainly to higher solar cell efficiency. Until recently, most high-quality solar cells were about 18% efficient. In 2020, however, the global JinkoSolar company raised that to 24.79%. The launch of those ultra-efficient modules lowered the USA’s domestic average cost of solar-produced electricity. It is now (early 2021) about US$38 per megawatt-hour (MWh). This cost is similar to that of producing electricity from newly built coal-fired power plants. Currently, the most efficient solar projects in Chile, the Middle-East and China produce electricity for under US$30/MWh. Wind power projects in Brazil, the USA and India are likewise.

The rise in production capacity and efficiency is primarily in China. It is now the centre of global solar panel manufacturing. China’s module production was 17% higher in early 2020 than in the same period of 2019. This despite exports falling slightly.

The implications of solar energy increase are immense. Overall emissions are substantially reduced. Apart from making, transporting and installing solar modules and associated electronics, it is zero thereon. Most solar modules last for at least 25 years. Meanwhile, appliance makers seek to reduce energy use.

Renewable energy tax credits

Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems.

Tax Credit: 

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2023
  • 22% for systems placed in service after 12/31/2022 and before 01/01/2024

Expires:  December 31, 2023

Details:  Existing homes and new construction qualify.  Both principal residences and second homes qualify. Rentals do not qualify.

The USA’s solar energy market is forecast to increase. That increase is a likely (compounded) annual 17.3% throughout  2020-2025. Tax credits on renewable energy-related matters may expire in 2021. Solar power investors in solar power will expedite finishing projects. This trend may partly offset COVID-19 investment impacts.

A 30% tariff on solar module imports has already forced USA producers to become more competitive. Furthermore, to increase domestic manufacturing. Cost-effective battery energy storage technology is also needed. Significant developments are already well underway.

It is now all but sure that solar (and wind) power will continue to displace traditional base-load power sources. This will happen not just in the USA. It will be worldwide.

Solar Success

Whether you’re building a new home or adding solar to an existing structure, this is the one book you can’t afford to be without.

eBook versions

Paperback version

Any bookshop, whether online or bricks and mortar, can order copies of Solar Success.  Just ask.
ISBN: 978-0-6487945-4-7

Solar Success

Whether you’re building a new home or adding solar to an existing structure, this is the one book you can’t afford to be without.

eBook versions

Paperback version

Any bookshop, whether online or bricks and mortar, can order copies of Solar Success.  Just ask.
ISBN: 978-0-6487945-4-7