The United States has significant potential to increase its rooftop solar capacity over the coming decades by encouraging uptake among consumers. The installation of rooftop solar panels could help consumers significantly decrease their energy bills and reduce the burden on the grid.
However, to achieve this, the government would likely have to introduce a range of incentives, as well as increase the public understanding of the technology, to encourage consumers to invest.
U.S. Rooftop Solar Potential
In August, an article from the energy research firm Wood Mackenzie estimated that 70 million residential homes will install solar panels over the next 25 years. This estimate excluded unsuitable homes and those that have already installed solar. “Assuming average system sizes more than double by 2050, this potential equates to an addressable market of about 1,494 GW,” Wood Mackenzie analyst Zoë Gaston wrote.
Meanwhile, a 2016 National Renewable Energy Laboratory (NREL) analysis suggested that there were more than 8 billion square meters of suitable rooftop space available for solar panel installation in the United States. This represents over 1 terawatt of solar capacity potential. In addition, as solar panels become more efficient, the rooftop power production potential could be even greater.
Residential and other small rooftops represent about 65% of the national rooftop potential, and 42% of residential rooftops are in households with low-to-moderate income, according to the U.S. Department of Energy’s Solar Energy Technologies Office.
In 2018, the NREL estimated that an average of 3.3 million homes a year will be built or will require roof replacement, which represents the potential for roughly 30 GW of solar capacity to be deployed each year.
The California Case
As utility companies struggle to keep up with the growing power demand, many are diversifying their energy mix to include a range of renewables, as well as fossil fuels. Meanwhile, many consumers have invested in residential solar power to ensure that they have reliable access to clean electricity. Rooftop solar panels are becoming increasingly more common in regions of the United States with abundant sun, such as California.
The 2016 NREL report suggested that rooftop solar could provide as much as 74% of residential electricity in California, thanks to the favorable weather conditions across the state. Rooftop systems have improved significantly in recent years to be more efficient and are easy to install. In addition, small-scale batteries are now available to consumers who want to ensure a more stable flow of electricity.
“Solar energy systems are installed on more than 1.8 million California homes and businesses, exceeding the state’s goal to install one million solar roofs,” the California Public Utilities Commission stated in 2023.
Despite the strong support for rooftop solar among California’s residents, regulators have restricted the growth of the sector in favor of large energy projects. Meanwhile, in September, the New York Times reported that consumers in the state were “rushing to install systems before a federal tax credit goes away next year.”
Bringing an End to the Residential Solar Tax Credit
The U.S. residential solar power market is dominated by a variety of small companies, rather than big names such as Sunrun. These are the firms that are likely to be hit the hardest by a new law that was passed by the Trump administration in July. At the end of 2025, the Residential Clean Energy tax credit, which has been in place for two decades, will be scrapped.
The tax credit reduced the cost of a residential solar system by 30%, regardless of whether homeowners purchased the panels outright or with a loan. The tax credit reduced the cost of a conventional 11-kilowatt $28,000 rooftop solar system by around $8,400. The change means that many consumers may not be able to afford solar rooftop installations that the credit may have helped them access.
This is just one of many recent blows to the solar energy industry, which has been hit hard by several of the Trump administration’s energy policies. Wood Mackenzie estimates that on a low-case forecast, the U.S. could experience a 42% decline in residential solar installations between 2025 and 2029 compared to if the tax credit remained in place.
The move will likely lead to major layoffs across the solar power industry. The Solar Energy Industries Association estimates that cancelling the tax credit could result in 84,000 job losses by the end of 2026.
The U.S. rooftop solar market has grown rapidly in recent years owing to greater consumer awareness of the technology, the falling price of solar installations, and federal financial support through the Residential Clean Energy tax credit. Energy experts see strong potential for the growth of the country’s rooftop solar capacity in the coming decades. However, the recent cancellation of the tax credit and the introduction of harmful policies for the solar power sector by the Trump administration could stall this progress.
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