The U.S. solar market nearly doubled its electricity-generating capacity last year, as 14.6 megawatts (MW) of new photovoltaic capacity was installed throughout the country.
There was a 95% increase in new solar installations over the previous year, when 7.5MW were installed, according to a new report from GTM Research and the Solar Energy Industries Association (SEIA). The complete report -- titled "U.S. Solar Market Insight, 2016 Year in Review" -- is due to be released on March 9.
According to the report, for the first time U.S. solar power ranked as the top source of new electricity-generating capacity, accounting for 39% of all new power across all fuel types in 2016.
The U.S. now boasts more than 1.3 million solar installations, with a cumulative capacity of over 40 gigawatts, according to the report.
"In a banner year for U.S. solar, a record 22 states each added more than 100MW," Cory Honeyman, GTM Research's associate director of U.S. solar research, said in a statement. "While U.S. solar grew across all segments, what stands out is the double-digit gigawatt boom in utility-scale solar, primarily due to solar's cost competitiveness with natural gas alternatives."
The record growth in solar was represented mostly by utility-scale installations, which were spurred on by energy suppliers hoping to take advantage of the federal Investment Tax Credit (ITC), which was set to expire last year. The ITC offers a tax credit equal to 30% of a solar or wind project's costs. Just two weeks before it was set to expire, however, Congress -- in a surprise move -- extended the ITC for an additional five years.
Lucas Mearian. SolarCity workers prepare to install panels on the rear of a home.
With the ITC extension, U.S. demand for solar is now expected to continue to grow through 2021, with an increasing number of states likely to reach grid parity as companies bring down renewable energy costs and retail electricity pricing continues to rise, according to Vishal Shah, an analyst with Deutsche Bank.
Along with record installations came a record number of jobs created by the solar industry, according to a separate report. In 2016, there were 260,000 employees working in the solar market, representing a 25% increase over the previous year. One out of every 50 new jobs added in the U.S. in 2016 was created by the solar industry, representing 2% percent of all new jobs, according to the The Solar Foundation's Solar Jobs Census 2016.
Sign up for CIO Asia eNewsletters.