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Resi solar markets are growing broader and deeper, report says

Solar markets are “broadening” into less affluent states, driven to a large extent by solar market growth in Texas and Florida.

Residential solar markets are growing both broader and deeper as the income level of adopters falls and as more states become attractive for installers.

The trends were included in the latest edition of the annual report, Residential Solar-Adopter Income and Demographic Trends, from the Energy Department’s Lawrence Berkeley National Laboratory.

The report was based on address-level data for 2.8 million residential households across the country that have installed solar onsite. It describes trends in solar-adopter household income levels, race and ethnicity, language preference, rurality, education levels, occupation, age, home value, and location within a “disadvantaged community”.

The report also describes income differences across system ownership models, installers, system sizes, stand-alone vs. paired solar-plus-storage systems, and systems on multi- vs. single-family buildings. This update includes data on systems installed through 2021.

The following are a few select findings from the latest update:

Solar adopters span all income ranges. Solar adopters include households across all income levels, as shown in Figure 1 on the left. For example, roughly one third of all households that installed solar in 2021 had incomes between $50,000 and $100,000, while 15% of adopters were below that range and roughly half were above that range.

Figure 1. Solar-adopter income distribution in 2021 (left) and comparison of median incomes between solar adopters and all households (right).

Solar adopter incomes skew high, compared to the broader population. As shown in Figure 1 on the right, the median household income for 2021 solar adopters was $110,000, compared to $79,000 for all U.S. owner-occupied households and $63,000 for all U.S. households (including renters).

The disparity in these national numbers partly relates to the fact that close to half of residential solar adopters were in California, a relatively high-income state. However, as shown in the report, even at the individual state level, solar-adopter incomes consistently skew high.

Solar adoption has been slowly shifting toward less affluent households over time. The median household income of 2010 solar adopters is $129k, compared to $110k for 2021 solar adopters, as shown by the Absolute Income line in the left-hand figure below (which is based on current incomes for all solar adopters).

The shift toward less affluent households partly reflects a “deepening” of solar markets, as indicated by the Relative Income line, which compares solar-adopter incomes to all households in the same county and shows a steady downward trend.

Solar markets are also “broadening” into progressively less affluent states, as shown in the figure on the right-hand side. That latter trend has been driven to a large extent by solar market growth in Texas and Florida, which fall respectively within the sets of Middle- and Low-Income states. 

Figure 2. Temporal trend in solar-adopter median incomes (left) and distribution of solar adopters across states (right). For the figure on the left, solar adopter incomes are based on the year 2022, regardless of when PV installation occurred, without any inflation adjustment. For the figure on the right, states are grouped based on whether they fall into the lower, middle, or upper third of all states, in terms of median income of all households.

The share of the solar market in disadvantaged communities has been rising over time. The Energy Department has developed a designation for “disadvantaged communities” (DACs) that considers criteria related to energy burden, environmental and climate hazards, socio-economic vulnerabilities, and fossil dependence.

Using these designations, Figure 3 shows that the percentage of residential solar installations in DACs more than doubled from 5% in 2010 to 11% in 2021. Despite that improvement, the report said that DACs still remain under-represented relative to their share of the population as a whole (18% of households).

Figure 3. Percentage of annual residential solar adopters in disadvantaged communities (DACs).

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