Solar Industry Analysis

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Power plant using rows of solar panels
Power plant using rows of solar panels (Image: Jeff_Hu/iStock/Getty Images)

The majority of energy in the United States comes from fossil fuels such as coal, petroleum and natural gas. Renewable energy accounts for approximately 10 percent of consumption, as of publication. Solar technology contributes to the advancement of renewable energy resources more than any other industry, enjoying record-breaking growth year after year.

Growth of Solar Installations

The solar industry enjoys consistent growth on a yearly basis. According to the Solar Energy Industry Association, the first quarter of 2014 resulted in the second-best quarter for the industry as a whole, with 79 percent more installations compared to the previous year's first quarter. Rising prices for fossil fuel energy source such as natural gas and coal drives more people to consider solar energy. Increased financial investment in solar energy also spurs industry growth, funding technological innovations that continue to raise the value of solar energy products.

Geographic Distribution

California invested in more solar energy installations than the rest of the states combined, building an additional capacity of 959 megawatts in the first quarter of 2014. New Jersey ranked second for new installations, creating 64 megawatts, which is less than half of residential construction of solar panels in California. Arizona installed the third most, at 52 megawatts, followed by North Carolina at 35 megawatts and Hawaii, with 27 megawatts. Considered a newer market, North Carolina's growth provides a boost to the industry as a whole.

Market Segments

As of publication, current growth of the solar industry springs mostly from the utility sector, which enjoyed the largest quarter for new installations at the end of 2013, with 1,400 megawatts of capacity, and the second-largest in the first quarter of 2014, at 873 megawatts. Residential installations in the first quarter of 2014 increased by 38 percent compared to the first quarter of 2013 and decreased by 11 percent from the last quarter of 2013. Non-residential installations in the first quarter of 2014 declined by 12 percent compared to the previous year's first quarter and by 44 percent compared to the fourth quarter of 2013.

Industry Comparison

As of publication, the creation of new energy through solar technology almost triples the amount of all other new energy sources. In the first quarter of 2014, solar installations accounted for 74 percent of new capacity, while wind energy was the closest competitor, responsible for 20 percent of new capacity. Natural gas development in the same quarter totaled 4 percent, while geothermal and other energy sources created 1 percent of new energy apiece. As of publication, current projections forecast that a new solar installation will take place every 2.4 minutes throughout 2014, suggesting continued growth for the solar industry.

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