North America Solar Photovoltaic (PV) Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

North America Solar Photovoltaic (PV) Market Trends and Insights

Inflation Reduction Act Investment and Extended ITC Incentives

The 30% base ITC, extended through 2032, underpins project economics across the North America solar photovoltaic market. Developers may stack an additional 10 percentage points for domestic-content compliance and another 10 points for siting in former fossil-fuel communities, lifting the effective credit to 50% for qualifying projects. More than USD 50 billion in new U.S. manufacturing announcements since 2022 reflect this design, including a USD 1.45 billion Department of Energy loan commitment that will lift Qcells’ Georgia complex to 8.4 GW of fully integrated capacity.^{[1]Qcells, “DOE Loan Commitment Announcement,” qcells.com} The domestic-content bonus requires 100% U.S.-sourced steel and at least 55% domestic product cost, prompting backward integration into polysilicon and wafer production. Low-income community adders are steering distributed generation toward historically underserved census tracts, supporting equitable adoption and broadening the residential addressable market.

Declining Levelized Cost of Energy for Utility-Scale Solar

Utility-scale solar’s unsubsidized levelized cost fell to USD 46 per MWh for 2024-vintage projects, and the ITC reduces that to USD 31 per MWh, under-pricing new gas combined-cycle capacity by roughly 20%. Module efficiencies above 24% for TOPCon and heterojunction designs, combined with single-axis trackers on 85% of new builds, are raising net capacity factors and lowering balance-of-system costs. Bifacial modules now represent more than 60% of U.S. procurement and add 5%-10% energy gain in high-albedo sites.^{[2]National Renewable Energy Laboratory, “Bifacial Module Field Performance,” nrel.gov} Capital costs averaged USD 1.43 per WAC-watt in 2024, allowing developers in Texas and the Southwest to sign sub-USD 30 per MWh power-purchase agreements that displace coal retirements and defer gas peaker construction.

Corporate PPA and Net-Zero Commitments

North American corporations contracted over 15 GW of renewable PPAs in 2024, with solar accounting for nearly 60% of the volume. Microsoft’s 12 GW, 8-year supply deal with Qcells marked a shift from project-level PPAs to upstream module procurement that locks in price and domestic-content compliance years before commissioning. Data-center and manufacturing buyers are pairing solar contracts with co-located storage to meet hourly load obligations, typically at a 10%-15% premium to solar-only deals. The Renewable Energy Buyers Alliance reports that three-quarters of Fortune 500 companies with net-zero goals now require time-matched clean-energy procurement, lifting demand for 24/7 carbon-free certificates.

Grid-Forming Inverter Adoption

Grid-forming inverters that synthesize voltage and frequency autonomously are moving from pilot projects to market standards as solar penetration surpasses 30% of load in California, Texas, and Hawaii. FERC Order 2023 mandates that new interconnection requests demonstrate grid-forming capability or equivalent system-strength contribution, accelerating IEEE 2800 adoption. California ISO’s 2024 queue lists more than 40 GW of solar-plus-storage projects equipped with grid-forming controls, a configuration that can shorten interconnection timelines by 12-18 months by reducing transmission-upgrade needs. At the residential scale, Enphase’s IQ9 microinverter series embeds grid-forming functionality, enabling rooftop systems to supply voltage support during disturbance events.

Interconnection and Transmission Bottlenecks

The regional interconnection queue topped 2,600 GW in 2024, with solar accounting for 1,086 GW, yet historically, only 15%-20% of queued capacity reaches operation.^{[3]Lawrence Berkeley National Laboratory, “Queued Up: Interconnection Trends 2025,” lbl.gov} The median queue time stretched to 5 years, up from 2 years in 2015. Cluster studies mandated by FERC Order 2023 are designed to streamline reviews, but implementation lags have left developers carrying high-deposit exposures while waiting for study outcomes. In the Midwest and Mid-Atlantic, network-upgrade costs exceed USD 100 per kW, eroding project margins and steering sponsors toward distribution-level or off-grid solutions that bypass bulk-system constraints. Only 12% of U.S. transmission added since 2010 was built proactively ahead of generation, creating a structural bottleneck that defers 20-30 GW of otherwise viable capacity each year.

Rising Interest-Rate Driven Financing Costs

The weighted-average cost of capital for utility-scale solar rose from 4.2% in 2021 to 7.1% in 2024, lowering unlevered internal rates of return by 150-200 basis points. Tax-equity yields climbed to 8%-9%, trimming the net present value of monetizable credits. Merchant-exposed projects in ERCOT face wider basis risk, complicating revenue certainty and prompting lenders to demand additional reserves. Construction-to-permanent debt structures are giving way to bridge loans that add 50-75 basis points in cost, a burden most acute for mid-scale assets below 100 MWAC. Financing pressures are encouraging sponsors to renegotiate PPA strike prices and to bundle storage capacity that qualifies for the standalone ITC introduced in 2024, partially offsetting rate-driven headwinds.

Segment Analysis

By Grid Type: Off-Grid Surges Amid Queue Congestion

Off-grid systems posted the fastest growth, expanding at a 21.30% CAGR through 2031 as mines, farms, and telecom operators adopt hybrid solar-plus-storage designs to avoid interconnection delays. The North America solar photovoltaic market size for off-grid assets is projected to grow from a modest base to 30.52 GW by 2031, while on-grid installations maintain numerical dominance. Remote mining operations in Nevada, Arizona, and northern Canada are pairing 5-20 MW solar arrays with diesel gensets, cutting fuel consumption 40%-60% and trimming payback periods to 4-6 years. Agricultural producers in California’s Central Valley and Texas’s High Plains deployed more than 1,200 solar-powered irrigation systems in 2024, limiting peak-period demand charges that often top USD 20 per kW.

Momentum is reinforced by federal and provincial grant programs that subsidize up to 50% of capital costs for rural renewable installations. Telecommunications carriers, facing stricter uptime requirements, are fitting cell towers in hurricane-prone regions with 10-50 kW solar-storage kits, reducing diesel refueling trips during grid outages. As lithium-iron-phosphate battery prices dipped below USD 150 per kWh in 2024, microgrid controllers matured, enabling autonomous load balancing that keeps total system costs competitive with grid-extension alternatives. Although on-grid projects retain 96.12% of 2025 installed capacity, the off-grid cohort supplies higher margins and shorter development cycles, a combination that is drawing specialized financiers and EPC firms into the niche.

Note: Segment shares of all individual segments available upon report purchase

By End User: Residential VPPs Outpace Utility Scale

Utility-scale projects captured 72.45% of 2025 deployments, supported by multi-hundred-megawatt plants in Texas, California, and Florida that exploit scale efficiencies and investment-grade PPAs. Even so, the residential sector is set to grow at a 19.15% CAGR through 2031, propelled by virtual power plant (VPP) aggregation, third-party ownership models, and state-level solar mandates. California’s building code, which requires rooftop solar on new homes, adds roughly 80,000 installations annually, while New York’s NY-Sun incentives stimulate sustained demand. Residential aggregations already enroll 2.5 GW of storage-backed capacity, and Federal Energy Regulatory Commission Order 2222 clears a path for distributed assets to bid into wholesale markets.

Commercial and industrial buyers are also accelerating adoption in high-cost states where tariffs exceed USD 0.15 per kWh. Warehouse operators electrifying vehicle fleets are installing rooftop solar to hedge energy costs and secure renewable credits that underpin sustainability commitments. Despite the residential sector’s rapid rise, utility-scale plants will still deliver the bulk of absolute capacity additions, but interconnection bottlenecks and land-use pushback create openings for behind-the-meter assets that can be built in 12 months rather than 5 years. Property-assessed clean-energy financing and loan-transfer rules lower credit-score barriers, broadening the eligible customer pool and tilting the adoption curve upward.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

The United States accounted for 90.65% of installed capacity in 2025, anchored by the Inflation Reduction Act’s extended ITC, state renewable standards, and coal retirements that free transmission headroom. Texas led additions with 8.5 GW in 2024 owing to ERCOT’s streamlined interconnection and plentiful land in West Texas and the Panhandle. California commissioned 6.2 GW, supported by its 60% renewable mandate by 2030 and robust corporate PPA demand centered in technology hubs. Florida’s regulated utilities advanced a 12 GW utility-scale pipeline under integrated resource plans that favor solar to hedge fuel volatility. While federal tax-equity structures give the United States a funding advantage, transmission congestion in MISO, PJM, and SPP is deferring 20-30 GW of projects annually, prompting developers to emphasize distribution-level interconnections and modular microgrid solutions.

Mexico is the fastest-growing geography at a 14.08% CAGR to 2031, driven by near-shored manufacturing that demands competitively priced renewable power. Automotive and electronics firms locating in Nuevo León, Coahuila, and Chihuahua are adopting on-site solar to offset industrial tariffs above USD 0.12 per kWh. A 2024 energy reform reopened private investment in sub-500 kW distributed generation, allowing commercial customers to bypass the federal utility’s monopoly and realize 20%-30% energy savings. High-irradiance states such as Sonora and Chihuahua attract utility-scale sponsors seeking cross-border export potential into Arizona and California load pockets. Although access to U.S.-style tax equity remains limited, a captive industrial customer base and clear sustainability mandates underpin bankable revenue streams even at a higher cost of capital.

Canada adds steady volume under provincial renewables targets and a 2024 federal ITC that mirrors the U.S. structure. Alberta installed 1.2 GW in 2024 through competitive procurement aligned with coal plant retirements. Ontario’s distributed-generation market brought online 300 MW of rooftop and small ground-mount projects under an adjusted Feed-in Tariff structure. Lower retail tariffs of USD 0.08-0.10 per kWh lengthen payback periods, yet provincial carbon-price regimes and corporate renewable-certificate demand sustain project flow. Quebec and British Columbia’s hydro-heavy grids exhibit cautious solar uptake, though mining and pulp-and-paper operators pilot solar-storage hybrids to meet rising internal carbon valuations. Federal and provincial collaboration on tax credits and accelerated depreciation is expected to narrow cost differentials with the United States and support continuous growth beyond 2025.

Note: Segment shares of all individual segments available upon report purchase