Half of U.S. Households May Go Solar by 2050

ot too long ago, having solar panels on a home was seen as a quirky extra, something only die-hard tech enthusiasts went for. Fast forward to now, and these shiny panels are on their way to become as commonplace on rooftops as satellite dishes once were. By 2050, it's estimated that nearly half of U.S. households will run on solar energy— an impressive prediction given all the challenges the residential sector is dealing with right now.

To give you a better idea of where the home solar market is going, SunValue is about to walk you through both the current challenges and the trends driving its recovery.

The Bright Horizon: A Surge in Solar Adoption

There’s encouraging news from the experts at Enverus Intelligence Research (EIR), a trusted name in energy analytics. Their updated U.S. Residential Solar and Storage Forecast is out, and the numbers are striking. By 2050, about 47% of American households are expected to have solar panels, up from 41% in the last forecast six months ago.

As states push for cleaner energy, solar is becoming a win-win for homeowners. They’re realizing that the combination of lower utility bills and tax incentives makes solar a smart financial choice, not just an eco-conscious one.

What's Behind This Rise?

The projected boom in solar energy use comes from a mix of key factors. First off, the cost of the most efficient home solar panels continues to decline. With improved technology and large-scale manufacturing, PV panels are becoming more accessible than ever. As utility rates continue to increase in parts of the country, solar energy becomes a reliable way to save over time.

Another major reason behind this surge is the growing economic sense of pairing solar panels with battery storage, letting homeowners store extra energy from the sun during the day and use it after dark. This helps lower grid reliance, especially when electricity demand is at its peak.

States such as Texas, Florida, and New York are likely to have the broadest adoption, following California’s early example. EIR also forecasts that by 2032, most households will combine solar with storage. California and Arizona may see this happen even sooner, with new net billing tariffs rolling out in 2026.

Source: Enverus Intelligence® Research

The Present-Day Challenges: A Market in Decline

The U.S. residential solar market may thrive by 2050, but 2024 has been anything but smooth for the U.S. home solar industry. The figures tell the story: the latest report from SEIA and Wood Mackenzie highlights a 37% drop in residential solar installations in the second quarter compared to the same period last year. Only seven states reported growth in solar capacity during the first half of 2024. With the market's slow current performance, Wood Mackenzie has revised its yearly outlook, lowering it by 5%.

The blame falls partly on rising interest rates, low buyer demand, and a delayed seasonal sales spike. The solar market didn’t get its usual boost during spring and summer, causing installers to cut staff and exit from less profitable regions. Some top companies have even gone bankrupt, a clear signal of the tough times the industry is facing.

Because of these setbacks, the residential solar market is projected to shrink by 19% this year, with every state besides California seeing an 8% decrease. The Golden State, responsible for 30% of new home solar capacity in 2023, expects a 41% drop in installations.

Given California’s leading role in the U.S. solar market, this is especially concerning. The state's success story is taking a hit as policy changes and rising business expenses make it harder for homeowners to install panels. Solar companies that thrived in California's once robust market are facing a shaky future, and this slowdown may stretch across the U.S.

Glimpses of Recovery: 2025 and Beyond

Despite 2024's challenges, there's every reason to stay positive about the future of residential solar. Many experts believe 2025 will be the start of a recovery, thanks to renewed consumer interest, government incentives, and more affordable solar options.

The SEIA report suggests the home solar market will grow by 14% in 2025, largely due to third-party ownership models, where people lease PV panels instead of buying them. The federal Investment Tax Credit (ITC) bonus adders will also help, offering extra incentives for solar projects using domestic materials or benefiting low-income areas.

In addition, the costs of cheap home solar panels are getting even lower, largely because of expected cuts in installation labor, permitting, and marketing expenses. According to the MIT Energy Initiative report, with the solar market expanding and competition rising, prices are likely to settle closer to the actual cost of installation.

By 2026-2029, the market is predicted to grow by more than 33 GWdc, with emerging markets and increasing electricity costs driving the progress. With that in mind, EIR’s forecast of solar powering half of American homes by 2050 seems well within reach.

Source: Solar Energy Industries Association (SEIA), Wood Mackenzie

Challenges on the Horizon

Although the future of solar energy in homes is promising, a few critical hurdles may impact its success.

Changing Policies

Solar adoption has thrived thanks to federal tax credits and subsidies, but these incentives are starting to fade. Without ongoing support, solar power may remain too expensive for many, especially for middle- and lower-income families. Additionally, critics argue that utility-scale solar could be a more affordable way to cut emissions, which raises concerns about the future of subsidies for homeowners.

Grid Integration

Solar panel owners have the option to sell any extra energy they produce back to the grid using net metering. However, this could pass on grid maintenance costs to non-solar users. As solar grows, it’s important to consider pricing systems that are fair to everyone.

Uncoordinated Regulations

The U.S. doesn't have a set of unified rules for solar installation, interconnection, and permitting. This patchwork approach leads to higher costs and delays. Without standardized guidelines, these gaps will continue to slow the progress of residential solar power.

Solar Power Surge: USA's Bright Outlook for 2024-2025

The U.S. solar industry is poised for significant growth in 2024-2025 despite recent challenges. Solar power generation is projected to increase by 75% from 163 billion kWh in 2023 to 286 billion kWh in 20251.

The Energy Information Administration (EIA) forecasts 45 GW of utility-scale solar projects to be deployed in 2024, rising to 53 GW in 2025.

While 2024 may see a temporary dip in residential solar installations, experts predict a rebound in 2025 with a 14% growth rate.

This growth is driven by federal incentives, declining installation costs, and increasing demand for clean energy across sectors.

By 2025, U.S. solar manufacturing capacity is expected to reach 57 GW, reflecting the industry's rapid expansion and potential for future growth.

Wrap-Up: Solar Keeps Shining, Even Through the Storm

The road to a solar-powered America is going to be anything but simple. This year’s drop in home solar adoption clearly shows that external factors, like interest rates and policy adjustments, can cause ripples even in the most flourishing industries.

Even so, it's easy to see that solar power is here to stay as a vital piece of the U.S. energy mix. With rising utility bills, homeowners will keep choosing solar—an eco-friendly solution that’s easy on the wallet.

No doubt, the near future is likely to test the industry in new ways. But regardless of any difficulties, solar energy is on a sure path to success.

Sources:

https://energy.mit.edu/research/future-solar-energy/

https://seia.org/research-resources/solar-market-insight-report-q3-2024/