In 2022, there were 5730 utility-scale solar photovoltaic (PV) plants operating in the United States and an additional 13 solar thermal plants. Those plants generated 146 terawatt-hours (TWh) of electricity, equivalent to about 3.4% of utility-scale generation from all sources. Small-scale solar PV such as rooftop solar generated an additional 58 TWh.
The modern solar power industry in the United States was launched in the wake of the energy crisis of the late 1970s when skyrocketing oil prices motivated governments and energy companies to develop “alternative” energy technologies. For example, the Solar Heating and Cooling Demonstration Act of 1974 ordered the installation of solar heating and cooling units in federal buildings by 1977 to acclimate the public to the new technology1. The federal government launched the Solar Energy Research Institute (now the National Renewable Energy Laboratory) in 1977 to perform research and help deploy and commercialize solar energy. Despite these other efforts, electricity from solar sources remained a niche interest through the 1990s.
Beginning in the 2000s, forces combined to jumpstart the solar industry. The first factor was the continuous decline in the cost of solar systems in part due to dramatic improvements in the efficiency of solar cells. At the utility scale, electricity from solar PV became cost-competitive with fossil and nuclear sources. Economic viability was enhanced by government subsidies. The American Recovery and Reinvestment Act of 2009 created grants and tax benefits for companies that installed solar plants. The Infrastructure Investment and Jobs Act (2021) and the Inflation Reduction Act (2022) created historic levels of investment tax credits, production tax credits, and other incentives to install solar energy.
State energy policies have played a pivotal role in encouraging solar power. Stop the player in any year after 2015 and look at Minnesota, Massachusetts, and North Carolina. The surge in new capacity additions is due to those states’ laws and policies that include solar production tax credits, clean energy standards for electricity generation, renewable portfolio standards, and other incentives.
1 Matthew Sabas, History of Solar Power, Institute for Energy Research, February 18, 2016. Link