US solar power generation industry

The US solar power generation industry includes about 150 companies that provide a small but growing amount of the nation’s electricity. Major companies include independent producers NextEra Energy, Sempra Generation, and NRG Energy, as well as utilities such as Florida Power & Light (a subsidiary of NextEra Energy). The industry is highly concentrated: the top 10 utilities involved in solar power generation accounted for 80 percent of the solar utility market in 2009, according to the Solar Electric Power Association (SEPA). Overall, solar energy accounts for less than 1 percent of the energy consumed in the US today.

The US is the world’s fourth-largest solar electric market, behind Germany, Spain, and Japan, according to the Solar Energy Industries Association.

As with other power sources, demand for solar power is driven by residential, commercial, and industrial electricity demand, which increases with population and economic growth. Additionally, growing concern over environmental and geopolitical issues surrounding fossil fuels has boosted interest in renewable energy sources such as solar. Profitability is determined by government regulations and incentives, as well as technological factors. Large companies have an advantage in their ability to make heavy capital investments necessary to build solar power generation facilities. Small companies can compete by securing venture capital and utilizing government subsidies.