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					</table>New residential solar installations in the U.S. had a median size of 7.2 kW in 2022, a significant jump from the 2.4 kW seen in 2000, thanks to cost reductions and improved module efficiencies,  according to the Lawrence Berkeley National Laboratory (<a href="https://emp.lbl.gov/" target="_blank" rel="noopener">LBL</a>).
This trend is heavily influenced by California, which contributes significantly to the data even if it has smaller residential system sizes. In most states, the median size of residential photovoltaic (PV) systems in 2022 exceeded 8 kW, with many states exceeding 9 kW.
The annual “Tracking the Sun” report from Berkeley Lab outlines patterns in the U.S. grid-tied solar PV systems and PV systems combined with energy storage. The report is based on data from 3.2 million systems installed up to the end of 2022, which accounts for more than 80% of all systems installed up to that point.
Distributed solar refers to residential installations, non-residential systems mounted on rooftops, and ground-mounted systems with a capacity of up to 5 MW.
PV System Characteristics
Over the last two decades, residential solar system sizes have consistently increased in the U.S. due to reduced costs and improved module efficiencies. Non-residential solar system sizes have followed a less predictable path, spanning a wide range of sizes. While most of these systems are relatively small, with a median size of 25 kW in 2022, a long tail of larger installations contributes to the variability in system sizes in this category.
<img loading="lazy" decoding="async" class="aligncenter wp-image-59454 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1.png" alt="" width="752" height="265" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1.png 752w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1-300x106.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1-650x229.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1-624x220.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture1-1-600x211.png 600w" sizes="(max-width: 752px) 100vw, 752px" />
According to the report, median module efficiencies in residential systems showed a consistent upward trend over time from 13.5% in 2002 to 20.8% in 2022.
The use of module-level power electronics, such as microinverters or DC optimizers, has continued to grow. These electronics were present in 93% of residential systems, 83% of small non-residential systems (those with less than 100 kW capacity), and 39% of large non-residential systems (those with 100 kW or more capacity) installed in 2022.
Inverter-loading ratios (ILRs), which measure the ratio of module-to-inverter nameplate ratings, have generally increased as module costs decline. Historically, ILRs were higher for non-residential systems, but rising residential ILRs have narrowed the gap. In 2022, the median ILR was 1.22 for residential systems compared to 1.26 for large non-residential systems.
About one-third (34%) of large non-residential systems installed in 2022 were ground-mounted, and 8% had tracking capabilities. In contrast, only 12% of small non-residential and 1% of residential systems were ground-mounted, and tracking was rarely used.
Panel orientation has remained relatively consistent in recent years, with 54% of systems installed in 2022 facing southward, 24% to the west, and the majority of the remainder facing east.
Third-party ownership (TPO), including leasing and power purchase agreements, has declined in residential systems over time, from a peak of approximately 60% in 2012 to 24% in 2021. In the non-residential sector, TPO shares have remained relatively stable and historically been lower for small systems than large ones (14% vs. 32% in 2022). TPO tends to be more common in states with robust incentives.
For-profit commercial customers constitute the majority (&gt;75%) of non-residential site hosts, while the rest are a mix of tax-exempt customers like schools, government entities, and nonprofits. As expected, TPO is more prevalent among tax-exempt site hosts, with a rate of 38% compared to 16% among commercial hosts in 2022.
Paired PV+Storage Systems
Battery storage is increasingly being combined with distributed PV. In 2022, 10% of new residential PV installations and 7% of non-residential installations included battery storage. Hawaii had the highest residential attachment rate at 96%, while California had an 11% attachment rate, and most other states were in the range of 5-10%.
<img loading="lazy" decoding="async" class="aligncenter wp-image-59455 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2.png" alt="" width="752" height="285" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2.png 752w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2-300x114.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2-650x246.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2-624x236.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture2-600x227.png 600w" sizes="(max-width: 752px) 100vw, 752px" />
Storage is also being retrofitted onto existing PV systems. In 2022, 23% of new paired PV+ storage systems were retrofitted onto existing PV systems. California led in residential retrofits at 26%, driven by concerns about resilience and time-of-use pricing. More PV capacity was added to the existing PV system in about half of these cases.
The residential market has been moving towards paired systems with larger batteries, primarily due to the demand for backup power. However, in 2022, there was a slight reversal, with 35% of paired systems having 10+ kW of storage.
Conversely, paired non-residential systems are becoming smaller as smaller customers adopt them for various applications beyond managing demand charges. In 2022, just over half (51%) of all paired non-residential systems <a href="https://www.mercomindia.com/solar-plus-energy-storage-gains-market-share-in-residential">had</a> batteries smaller than 10 kW.
Median Installed Price Trends
Over time, standalone PV system prices have decreased by roughly $0.4 per watt annually. However, this decline slowed down after 2013, averaging $0.1-0.2 per watt per year due to stabilized module costs. Current price trends are mainly influenced by balance-of-system and soft costs. These costs have gradually fallen by $0.1-0.2 per watt per year on average, notes the report.
<img loading="lazy" decoding="async" class="aligncenter wp-image-59456 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3.png" alt="" width="752" height="269" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3.png 752w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3-300x107.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3-650x233.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3-624x223.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture3-600x215.png 600w" sizes="(max-width: 752px) 100vw, 752px" />
Nominal PV system prices increased recently but remained lower in real terms. Between Q1 2021 and Q4 2022, median prices rose by $0.1-0.3 per watt (4-13%). The price decreased by about $0.2 per watt for residential and large non-residential systems. This aligns with the decade-long trend.
National median installed prices from the Tracking the Sun dataset are higher than other PV pricing benchmarks, mainly due to different methods and data sources.
Median installed prices for paired residential PV+ storage systems have declined, reflecting a maturing market. However, pricing trends for paired non-residential systems are unclear due to limited sample sizes.
<img loading="lazy" decoding="async" class="aligncenter wp-image-59457 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4.png" alt="" width="752" height="278" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4.png 752w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4-300x111.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4-650x240.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4-624x231.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/10/Picture4-600x222.png 600w" sizes="(max-width: 752px) 100vw, 752px" />
Variations in Installed Prices
System size significantly affects installed prices, with a $1/W difference in median prices between the smallest and largest residential systems and a $2.6/W difference between the smallest and largest non-residential systems.
In the non-residential sector, prices are higher for systems installed at tax-exempt customer sites compared to commercial site hosts. However, this trend appears to be unique to California, which is a significant part of the market. The price difference is most pronounced for large non-residential systems in California, where tax-exempt customers paid a median price of $3.6/W in 2022, compared to $2.1/W for commercial customers.
The energy storage market in the U.S., including grid-scale, residential and community, commercial, and industrial segments, <a href="https://www.mercomindia.com/us-grid-scale-energy-storage-q2-2023" target="_blank" rel="noopener">experienced</a> an 80% year-over-year growth in the second quarter of 2023, adding a total of 5,597 MWh, a report by Wood Mackenzie and American Clean Power Association said.

Reduced Cost & Module Efficiency Drive Residential Solar Growth in the US

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					</table>A higher share of households with lower incomes in the U.S. have been adopting solar over the past 11 years, which has brought down the median household income for solar adopters by 14% to $110,000/year in 2021 compared with 2010, a report published by the Lawrence Berkeley National Laboratory (<a href="https://www.lbl.gov/" target="_blank" rel="noopener">LBL</a>) showed.
However, the report said, these households are still 76% richer compared with the median income of U.S. households which stands at $63,0000/year. The median income of solar adopters is higher relative to national median incomes, partly because roughly half of the solar adopters are in California, a relatively high-income state, the report said.
The report detailing income and other socio-economic trends of 2.8 million residential solar adopters found that the U.S. solar market has steadily broadened into low- and middle-income states of America since 2016, reaching 15% and 26% of installations made in 2021, respectively. Texas is a mid-income state, while Florida is a low-income one.
<img loading="lazy" decoding="async" class="aligncenter wp-image-43953 size-full" src="https://mercomindia.com/wp-content/uploads/2022/11/Picture1-2.png" alt="" width="1160" height="888" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2.png 1160w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2-300x230.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2-768x588.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2-650x498.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2-624x478.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture1-2-600x459.png 600w" sizes="(max-width: 1160px) 100vw, 1160px" />
One-third of all solar adopter households in 2021 earned between $50,000 and $100,000, while 15% of adopters were below that range and around 52% were above the specified range.
Most states show lower-income households adopting solar over time, with an average 1-2% drop annually between 2010 and 2021.
12% of PV systems in 2021 were paired with storage
The report said that a major contribution to the variations in incomes could be from households with lower-to-moderate income (LMI), with 22% of all adopters in 2021 earning less than 80% of area median income and an additional 21% between 80% and 120% of area median income.
<img loading="lazy" decoding="async" class="aligncenter wp-image-43958 size-full" src="https://mercomindia.com/wp-content/uploads/2022/11/Picture2.png" alt="" width="1275" height="811" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2.png 1275w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2-300x191.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2-768x489.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2-650x413.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2-624x397.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/11/Picture2-600x382.png 600w" sizes="(max-width: 1275px) 100vw, 1275px" />
The incomes of solar adopters have consistently remained higher for systems paired with battery storage, host-owned systems, and for systems installed on buildings accommodating single families. Around 12% of PV systems in the 2021 sample considered in the report were paired with storage.
Disadvantaged communities under-represented
The percentage of residential solar installations more than doubled to 11% in 2021 from 5% in 2010 in disadvantaged communities.
However, the Berkeley report said that despite the improvement in the adoption rate, Disadvantaged communitieremain under-represented, given that they comprise 18% of the total U.S. households.
While the DACs are 15-20% of households in all states, which is fairly uniform across states, the percentage of photovoltaic adopters in DACs varies widely, from 6% to 46%, but it is typically less than 20%.
According to another report by LBNL <a href="https://mercomindia.com/solar-plus-energy-storage-gains-market-share-in-residential/" target="_blank" rel="noopener">released</a> last month, the median installed prices of solar PV systems across most American states fell year-over-year, with the residential segment recording average annual declines of up to $0.2/ W annually.

More Lower Income Households Adopted Solar in the US Between 2010-2021

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