Solar energy is currently the most popular renewable energy source in US, and thanks to this huge popularity the US installed solar power capacity is constantly increasing. US currently has around 1.4 gigawatts of installed solar power capacity but this number will likely significantly improve in years to come, with some of the latest reports suggesting that solar power could reach 4.3 percent of the US total power capacity by 2020.
The latest report from Bloomberg New Energy Finance predicts that the U.S. solar energy market for photovoltaic and solar thermal electricity generation will grow annually by 42 percent to reach 44 gigawatts (GW) by 2020 as long as the domestic solar industry can attract $100 billion worth of investment into new solar energy projects.
The capacity of large-scale solar thermal projects should rise from 0.4 gigawatts today to around 14 gigawatts by 2020 while photovoltaics (PV) is expected to grow annually by 34%, reaching 30 gigawatts by 2020.
The two main reasons why many investors are finding solar energy sector to be very attractive are high electricity prices and generous incentives. Also the cost of typical photovoltaic module has dropped by more than half over the past two years, and solar panels are becoming increasingly popular clean energy option for many homeowners.
The US solar industry has given huge boost from different policy measures such as tax credits, capital expenditure grants, generation incentives and renewable electricity credits, all supportive of new solar energy projects. Without such policy solar energy sector would find it very hard to continue its growth because solar power is still significantly more expensive than other energy sources, even despite the recent drop in prices. Without subsidies solar power is approximately four times more expensive than coal, and solar energy sector still desperately needs different incentives to remain somewhat competitive with fossil fuels in terms of costs.
As expected, commercial sector should lead the way with around half of all photovoltaic installations between now and 2020, while utility and residential systems should contribute to one-quarter of future solar installations.
By taking into account currently available incentives in each US state the researchers have also estimated that commercial-scale photovoltaic systems can obtain unleveraged returns between 8 and 14 percent in states of Hawaii, Texas, New Jersey, and Massachusetts.