The U.S. community solar market set a new benchmark in 2024, installing 1.7 GWdc of capacity—a 35% increase from 2023—according to a report by Wood Mackenzie and the Coalition for Community Solar Access (CCSA). However, long-term growth remains uncertain amid shifting national and state policies.
According to the report, New York, Maine, and Illinois spearheaded this expansion, collectively contributing 83% of national installations and setting annual records. As a result, cumulative community solar capacity now stands at 8.6 GWdc.
“Caitlin Connelly, research analyst and lead author of the report, stated that 2024 saw record community solar growth. However, top state markets are nearing saturation, limiting long-term expansion. Meanwhile, emerging markets have been slow to develop, and program size caps restrict their ability to offset declines in larger markets.”
Wood Mackenzie’s base case scenario projects an average annual decline of 8% in community solar growth through 2029, culminating in over 15 GWdc of cumulative installations. However, policy shifts and interconnection reforms could significantly alter this trajectory.
According to Connelly, the new U.S. administration has introduced significant uncertainty in the solar sector. However, material actions taken so far have led to minimal changes in the base case outlook. In a worst-case scenario, the five-year outlook could contract by 40% compared to the base case, while stable federal policies and improving state regulations could lead to a high-case outlook 37% above the base case.
Potential new state markets
New state markets could provide a boost, with legislative efforts in Pennsylvania, Ohio, Missouri, Iowa, Georgia, Washington, and Wisconsin gaining unprecedented traction. These states signal bipartisan support for community solar expansion, with some incorporating it into broader energy strategies like Pennsylvania’s Lightning Energy Plan. If successful, these new markets could enhance the base case forecast by at least 16% by 2029.
Caitlin Connelly noted that, as opposition to new legislatively enabled community solar programs persists, developers are adapting their business models and exploring alternative approaches to community-scale development. These resources are well-positioned to enhance grid resilience and meet rising electricity demand, as they can be deployed and scaled rapidly while integrating storage near customer load centers.
LMI customers could expand
Community solar dedicated to low-to-moderate income (LMI) subscribers remains concentrated in New York and Massachusetts, which account for 49% of the 1 GWdc of LMI-serving capacity. Currently, LMI subscribers make up 14% of total community solar deployment.
With stricter LMI participation requirements in new state programs, LMI capacity is expected to grow to 18% of total community solar by 2026. However, federal policy uncertainty surrounding the LMI Communities Adder and Solar for All funding could hinder long-term expansion.
Developer and asset owner leaderboards remain highly consolidated
Market concentration among top developers is shifting. In 2024, the top five community solar installers held a 19% market share, down from 25% in 2023. Asset ownership remains more consolidated, with the top 10 owners controlling 54% of installations for the year and 40% of total cumulative capacity. Leading asset owners include Nexamp, AES Clean Energy, and Nautilus Solar.
Jeff Cramer, President and CEO of CCSA, emphasized that the record-breaking growth of community solar in 2024 reflects the increasing demand for affordable, distributed energy. This surge coincides with unprecedented customer and grid demand for community solar. However, challenges such as interconnection delays and policy barriers are hindering the deployment of gigawatts of new local power, delaying billions of dollars in investment, and leaving millions of potential customers without access. Despite these obstacles, growing bipartisan support for addressing these issues suggests strong potential for continued record growth.
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