A record of nearly 12.5 gigawatts of new utility-scale solar capacity came online last year, according to a new Berkeley Lab report from the U.S. Department of Energy, bringing total capacity to more than 51.3 gigawatts across 44 states. In other words, nearly half (45%) of generating capacity was installed in 2021.

These growth rates aren't surprising, given the market dynamics. Median installed project costs fell to $1.35 per watt while the average market value rose to $47 per MWh. In fact, building and operating a solar plant is now cheaper than buying fuel for an existing natural gas plant, marking a significant milestone.

These growth rates do not factor in the impact of the Inflation Reduction Act. With several solar incentives and tax breaks, the new legislation could accelerate growth over the coming years, and further support the transition to renewable energy. Some estimates suggest that the bill could cut emissions by 40% as early as 2030.

California's solar market share reached 25% in 2021, making it the most solar-friendly state in the country. Meanwhile, Massachusetts, Nevada, Hawaii, and Vermont all surpassed 15% solar generation market share. However, these rates vary considerably depending on whether calculated as a percentage of total generation or load.

In terms of growth, Texas completed some of the most significant projects in the country last year at up to 420MW. The Lone Star State had about a third of its total capacity come online last year at about 3.9GW. Meanwhile, Florida, Georgia, and Virginia led solar growth in the Southeastern United States in 2021.

The median installed costs of solar have fallen by 76%, or 10% annually, since 2010, reaching just $1.35 per watt (AC). Large utility-scale solar projects also cost 21% less than smaller projects per MW of installed capacity. And operation and maintenance costs have fallen by 58% since 2011 as project portfolios grow and become more established. 

At the same time, performance has significantly improved thanks to technological breakthroughs. For example, tracking has helped boost capacity by nearly 5% in high-insolation regions. And battery technologies have enabled solar operators to maximize revenue and profitability with flexible grid timing.

For its part, the DOE anticipates that annual solar installs will triple by the end of the decade, reaching nearly 75GW in 2030.