Solar energy adoption across the United States varies widely, depending on factors like sunlight availability, government incentives, and installation costs. States like California and Arizona are often hailed as solar leaders due to their sunny climates and supportive policies. On the other hand, states with limited sunlight or weaker incentives may struggle to achieve widespread solar adoption. For example, California frequently ranks as the top state for solar development, while Alaska, with its shorter daylight hours, is far less ideal.
The Top 11 States for Solar Energy Development
As of December 2024, the United States has witnessed substantial growth in solar energy, with a cumulative installed capacity of approximately 219.8 gigawatts (GW). This expansion underscores the nation's commitment to renewable energy, with certain states leading the charge. Below is a ranking of the top 11 states in solar energy development, based on their installed photovoltaic (PV) capacity:
The following data comes from:
Statista: Top U.S. states in solar PV capacity 2024 | Statista
Choose Energy: Solar Energy Generation by State Report December 2024
No. 1：California
California continues to lead the nation with a cumulative solar PV capacity exceeding 48 GW as of June 2024. The state's success is attributed to progressive policies, including a state solar tax credit, net metering, property tax exemptions, and a robust Renewable Portfolio Standard (RPS) mandating 100% clean electricity by 2045. These measures have fostered a favorable environment for solar investments and installations.
No. 2：Texas
Texas has rapidly expanded its solar capacity, reaching approximately 32 GW by mid-2024. The state's pro-energy development culture and abundant sunlight have attracted significant investments in solar infrastructure. While Texas does not offer a state solar tax credit, it provides property and sales tax exemptions for solar equipment, enhancing the financial appeal of solar projects.
No. 3：Florida
Florida ranks third in solar energy production, contributing 6.4% to the national solar power output with 1,767 megawatt-hours (MWh) generated in September 2024. The state's abundant sunshine and supportive policies, such as property tax exemptions and net metering, have spurred significant investments in solar infrastructure.
No. 4：Arizona
Arizona's solar capacity reached 1,464 MWh in September 2024, accounting for 5.3% of the nation's solar production. The state's high solar insolation and favorable climate conditions make it an ideal location for solar energy generation. Arizona offers a state solar tax credit, property tax exemptions, and net metering policies, further encouraging solar adoption.
No. 5：Nevada
Nevada generated 1,408 MWh of solar energy in September 2024, representing 5.1% of the U.S. total. The state's commitment to renewable energy is evident through substantial investments in solar projects, capitalizing on its abundant sunshine. Nevada provides property and sales tax exemptions for solar equipment and has a strong RPS, requiring 50% renewable energy by 2030.
No. 6：North Carolina
North Carolina has been a consistent leader in solar energy, with a cumulative installed capacity of 9,698 megawatts (MW) as of 2024. The state's Renewable Energy and Energy Efficiency Portfolio Standard (REPS) and supportive tax credits have been instrumental in this growth. Additionally, North Carolina offers property tax exemptions and net metering policies to encourage solar adoption.
No. 7：New York
New York produced 726 MWh of solar energy in September 2024, contributing 2.6% to the national output. Despite its northern latitude, New York's investments in solar infrastructure reflect its commitment to renewable energy. The state offers a state solar tax credit, property and sales tax exemptions, net metering, and a comprehensive RPS aiming for 70% renewable energy by 2030.
No. 8：Georgia
Georgia generated 670 MWh of solar energy in September 2024, accounting for 2.4% of the U.S. total. The state's rapid growth in solar installations highlights its emerging role in the solar sector. Georgia provides property tax exemptions and has implemented net metering policies to support solar energy adoption.
No. 9：Virginia
Virginia produced 655 MWh of solar energy in September 2024, contributing 2.4% to the national output. Recent investments and policy shifts have propelled Virginia into the ranks of top solar energy-producing states. The state offers property tax exemptions and net metering, and has set a goal of 100% carbon-free electricity by 2045 under the Virginia Clean Economy Act.
No. 10：Colorado
Colorado generated 651 MWh of solar energy in September 2024, accounting for 2.4% of the U.S. total. The state's favorable climate and supportive policies have fostered significant growth in solar capacity. Colorado offers a state solar tax credit, property and sales tax exemptions, net metering, and has an RPS requiring 100% renewable energy by 2050.
No. 11：Illinois
Illinois has demonstrated substantial growth in solar energy, with a 33.9% increase in solar power generation from September 2023 to September 2024, reaching 427 MWh. This progress reflects the state's commitment to expanding its renewable energy portfolio. Illinois provides a state solar tax credit, property and sales tax exemptions, net metering, and has an RPS aiming for 25% renewable energy by 2025.
These rankings highlight the dynamic landscape of solar energy development across the United States, with each state implementing a combination of policies and incentives to drive solar adoption and contribute to national renewable energy goals.The 6 Worst States for Solar Energy Development
While many U.S. states have made significant strides in solar energy development, several lag behind due to factors such as limited sunlight, insufficient policy support, and minimal investment. Here are the six states facing the most challenges in advancing their solar energy sectors:
1. North Dakota
North Dakota ranks at the bottom in solar energy adoption, with only 0.01% of its electricity generated from solar power. The state has invested a mere $6 million in solar infrastructure, resulting in minimal residential solar adoption and only eight solar companies operating statewide.
2. South Dakota
South Dakota fares slightly better than its northern neighbor but still struggles with solar energy development. With just 0.02% of its electricity sourced from solar and an investment of $6 million, the state powers approximately 270 homes through solar energy. The limited presence of 14 solar companies indicates a nascent market.
3. Alaska
Alaska's unique geographical and climatic conditions pose significant challenges for solar energy adoption. Despite a $49 million investment, only 0.23% of the state's electricity comes from solar. The extreme variations in daylight hours, with prolonged darkness in winter, limit consistent solar energy generation.
4. West Virginia
West Virginia has installed a modest 31 megawatts (MW) of solar capacity, with just 19 solar companies operating within the state. Solar energy accounts for a mere 0.06% of the state's electricity production. The state's strong reliance on coal, being the second-highest coal producer in the U.S., contributes to the slow adoption of solar energy.
5. Nebraska
Nebraska has made limited progress in solar energy, with only 0.30% of its electricity generated from solar power, sufficient to power about 10,090 homes. However, there is potential for growth, as projections indicate an addition of 1,548 MW of solar capacity over the next five years, which could improve its national ranking.
6. Kentucky
Kentucky is among the states with minimal solar energy development. The state has limited policies and incentives to encourage solar adoption, resulting in low installation rates and minimal investment in solar infrastructure.
These states face a combination of geographical, economic, and policy-related challenges that hinder the growth of their solar energy sectors. Addressing these obstacles through supportive policies, increased investment, and public awareness could enhance their adoption of solar energy in the future.
Solar Incentives Across the U.S.
One of the key factors driving the adoption of solar energy is the availability of state and federal incentives. These incentives can significantly reduce the upfront costs of solar installation, improve return on investment, and make solar more accessible to homeowners and businesses. Below are some of the most impactful solar incentives available across various states, supported by data from the U.S. Department of Energy (DOE), the Database of State Incentives for Renewables & Efficiency (DSIRE), and the Solar Energy Industries Association (SEIA).
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) is one of the most well-known and impactful incentives available nationwide. As of 2023, the ITC allows homeowners and businesses to claim a tax credit of 30% of the cost of installing a solar system. This credit applies to both residential and commercial installations, and there is no cap on its value. According to SEIA, the ITC has been responsible for driving a 10,000% growth in the solar industry since its inception in 2006, making it a crucial factor in reducing solar installation costs and promoting widespread adoption.
Net Metering Programs
Net metering is another essential incentive offered in many states, allowing solar owners to sell excess electricity back to the grid and receive credits on their utility bills. States like California, New York, and New Jersey have some of the strongest net metering programs, where homeowners can offset their electricity costs with solar energy credits. According to the DOE, states with robust net metering programs often see faster solar adoption because this system improves the financial viability of solar investments by providing ongoing savings beyond the initial installation.
State-Specific Tax Credits
In addition to the federal ITC, many states offer their own tax credits or rebates to further reduce the cost of solar installations. For example:
- South Carolina offers a state tax credit covering up to 25% of solar installation costs, on top of the federal ITC, which makes solar significantly more affordable for residents.
- New York provides a tax credit of up to $5,000 for residential solar systems, which, combined with other state and federal incentives, leads to a quick return on investment.
- Louisiana offers a state solar tax credit that reimburses homeowners for up to 50% of installation costs, capped at $10,000, further driving solar adoption in the state.
According to DSIRE, these state tax credits, when combined with federal incentives, can reduce the overall cost of solar by 40% to 60%, depending on the location.
Solar Renewable Energy Certificates (SRECs)
In states with a Renewable Portfolio Standard (RPS), like New Jersey, Massachusetts, and Maryland, solar owners can generate Solar Renewable Energy Certificates (SRECs) for the energy their system produces. Utilities are required to purchase SRECs to meet state-mandated renewable energy goals, providing solar owners with an additional revenue stream. According to SEIA, SRECs can provide significant financial benefits, allowing homeowners to earn hundreds or even thousands of dollars annually, depending on the state and the size of the solar system.
Property and Sales Tax Exemptions
Many states offer property and sales tax exemptions for solar installations, further reducing the financial burden of going solar. For example:
- Florida and Texas both offer property tax exemptions that prevent homeowners from being taxed on the increased property value that solar installations add to their homes.
- Arizona and Minnesota offer sales tax exemptions on the purchase of solar equipment, which can save homeowners up to 8% on installation costs. According to DSIRE, these tax exemptions are a crucial factor in making solar more affordable and ensuring that the long-term savings are passed on to consumers.
Utility Rebate Programs
Several states have utility companies that offer direct rebates for solar installations. For instance:
- California’s Self-Generation Incentive Program (SGIP) provides rebates for homeowners installing battery storage systems with their solar panels, making solar-plus-storage an attractive option for energy resilience.
- New York’s NY-Sun Program offers significant upfront rebates for solar installations, which vary by region and utility company but can reduce the cost by as much as 25%.
According to the DOE, utility rebate programs can play a vital role in accelerating solar adoption by offering immediate financial relief for those investing in solar energy.
Conclusion
Understanding which states are best and worst for solar energy development can greatly impact your decision to invest in solar power. The data presented in this article is derived from reputable sources such as the U.S. Department of Energy (DOE), the Solar Energy Industries Association (SEIA), the National Renewable Energy Laboratory (NREL), and the Database of State Incentives for Renewables & Efficiency (DSIRE). These organizations provide up-to-date and reliable information on solar capacity, state incentives, and financial returns, ensuring that the insights shared here are both accurate and practical.
By leveraging the federal and state programs mentioned, you can make an informed decision on whether solar energy is right for you. Solar energy continues to evolve, and staying informed through reliable data sources will help maximize the benefits for both homeowners and businesses.
