The booming solar energy industry in the U.S. has now 2 million solar installations across the country with 96% of the projects being small-scale and in residential rooftops. These small installations are mostly specialized by companies like Tesla (TSLA), Sunrun (RUN), and Vivint Solar (VSLR) while the bigger ones mostly belong to companies like First Solar (FSLR) heavily financed by utilities and asset owners like NextEra Energy (NEP) Partners and TerraForm Power (TERP).
Even though it took nearly 40 years to reach the 2 million installations, analysts believe that the next 2 million will take only four years creating more opportunities for investors.
According to the Solar Energy Industries Association (SEIA) data, California accounted for 51% of the first one million installations thereby making it the industry hub. For the remaining one million, 43% of the installations are scattered across states like Florida, Texas, and Minnesota.
New solar capacity is mostly composed of large-scale projects accounting for 58% of the 10.6 gigawatts of solar power installed for utility-scale projects in 2018. This presents opportunities for companies like First Solar, NextEra Energy Partners, and TerraForm Power if they get the upcoming big projects.
Overall, solar energy is starting to impact electricity production in a big way. In 2018, large solar projects accounted for 1.5% of the electricity produced in the U.S. and this was 37 times higher than what it was in 2011. If the current trend continues, it will take another two to three years to account for another 1% production and may even surpass coal in market share by the end of 2030.
Of the three mentioned companies, SunPower has the leading market share in the industry and is adding energy storage to more than one-third of commercial solar installs. First Solar is among the largest solar manufacturers in the world and expects to have $1.6 billion to $1.8 billion of net cash on the balance sheet at the end of 2019.