Key takeaways


n 2023, the U.S. made significant strides in solar energy adoption, with over 29 gigawatts (GW) of photovoltaic (PV) generation capacity installed. Impressively, 31% of that was distributed solar, according to the Institute for Local Self-Reliance. This kind of solar power lets homeowners, small businesses, and public organizations generate their own green energy. Driven by strong state policies and community action, this trend is giving the traditional electricity industry a whole new look.

What is Distributed Solar?

Distributed solar, often referred to as on-site or decentralized solar, includes PV setups installed at or near the location where the electricity will be used, typically not exceeding 5 megawatts (MW) in capacity. This approach to solar energy is crucial in turning the tables on traditional power generation, offering a more personal, local form of electricity production.

Forms of Distributed Solar

Here’s a quick guide to the popular types of distributed solar:

  • Residential Rooftops: Homeowners are going solar by adding panels to their rooftops. These setups help cut down electricity costs and enjoy renewable energy right from your roof.
  • Commercial Buildings: Many businesses are getting in on the action too, equipping their roofs with solar setups. It's not just about saving money—it's about taking control of energy use and demonstrating their commitment to sustainability.
  • Community Solar Projects: Not everyone can fit high output PV panels on their roof, but community solar projects offer a great solution. It allows groups of people to share the perks of a single large solar array, without having to install anything themselves.

Distributed Solar Perks

Local Energy, Local Control

Distributed solar is all about keeping it local. These systems generate electricity right where it’s used—on rooftops or in community settings—skipping the need for long transmission lines and minimizing energy loss along the way. This is not only more efficient but also kinder to the environment, avoiding the extensive land use required by large utility-scale solar farms.

Tailored Energy Solutions

Distributed solar systems are like personal tailors in the energy world. Smaller in scale than their utility-sized cousins, they're designed to meet the specific demands of homes, businesses, or neighborhoods. This custom-fit approach ensures that energy production matches local demand exactly, putting the power (literally!) in the hands of everyday users.

Saving Green by Going Green

By setting up solar panels on your roof or joining a community solar project, you create your own energy, drastically cutting what you pay for power from the grid. It's a savvy economic choice that also happens to be eco-friendly, reducing greenhouse gas emissions with every kilowatt-hour you produce.

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Distributed Solar in Numbers

Research from the Institute for Local Self-Reliance (ILSR) reports that in 2023, the U.S. solar industry reached a major milestone, installing over 29 gigawatts of PV generation capacity. Remarkably, 31% of this, translating to about 9 GW, was from distributed solar. We're seeing a big shift to local and democratized energy generation, thanks to supportive state policies and the public's growing love for sustainability.

The ILSR map shows how distributed solar is spread across the U.S. states, factoring in population size. For example, Hawaii, Massachusetts, Rhode Island, and California lead the pack with over 100 watts per person. This shows that a large number of people in these states are tapping into the perks of home-grown solar energy.

Distributed Solar in 2023

Source: Institute for Local Self-Reliance (ILSR)

State Policies Driving Distributed Solar Adoption

State policies are the backbone of promoting distributed solar. They offer financial incentives, regulatory backing, and hassle-free access that make it easier for homeowners and businesses to jump on the solar bandwagon. Here's a breakdown of the key policies making a difference:

Net Metering

Net metering lets solar system owners sell any extra electricity they generate back to the grid, slashing their energy bills. This policy is a big reason why going solar is a financially sound choice for homeowners and small businesses. States with strong net metering laws see higher adoption rates of distributed solar, proving its effectiveness.

Community Solar Programs

Community solar programs are a game-changer for people who can't put panels on their own roofs. Renters, low-income families, and those with shaded rooftops can subscribe to a share of a community solar power. States like Colorado, Maryland, and New York have top-notch community solar policies, boosting their distributed solar capacity in a big way.

Renewable Portfolio Standards (RPS)

RPS is a policy that requires a certain percentage of a state's energy to come from renewable sources. Some states go a step further by setting aside specific targets for distributed solar within their RPS, ensuring that distributed solar gets its fair share of the action.

Simplified Interconnection Rules

Getting solar systems connected to the grid can be a bureaucratic nightmare, but simplified interconnection rules cut through the red tape. By streamlining the process, these rules speed up and simplify the journey for individuals and businesses looking to go solar. States with these user-friendly procedures are seeing a big surge in distributed solar installations.

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Distributed Solar Across the States

Solar energy isn't a one-size-fits-all scenario. It's a mixed bag, with each state showing unique trends and rules that shape their solar scene. Let's take a closer look at the front-runners in the solar game to see what they're getting right.


California sets the gold standard in solar power, holding the top spot for both general and distributed solar use. Thanks to its forward-thinking policies like net metering, ambitious renewable energy goals, and strong support for community projects, you'll find solar panels in California just about everywhere you look. The state's per-person distributed solar capacity is one of the highest nationwide, showing its all-in approach to embracing renewable energy.


Hawaii's blend of high energy costs and abundant sunlight creates the perfect environment for solar. The state's ambitious Hawaii Clean Energy Initiative aims to achieve a 100% renewable grid by 2045. Backed by a strong community PV program and favorable net metering policies, Hawaii has seen a major boost in its distributed solar capacity.


Massachusetts leads the way in solar energy with its innovative SMART Program, which offers incentives that make PV projects more appealing and accessible statewide. The state is also a big advocate for community solar, launching numerous projects that help people save on energy costs.

New York

New York is also at the forefront of distributed solar, thanks to its ambitious Reforming the Energy Vision (REV) initiative. REV focuses on modernizing the grid, encouraging clean energy innovations, and boosting distributed energy resources. New York is also a top player in community solar, with one of the highest capacities nationwide.

Solar Capacity 2023

Source: Institute for Local Self-Reliance (ILSR)

The Future of Distributed Solar

The outlook for distributed solar is bright and getting brighter. As more states tap into its advantages, we can anticipate even greater investments and creativity in this field. Here’s what’s likely to fuel the growth moving forward:

Technological Advancements

Future leaps in solar technology—like the most efficient home solar panels and smarter energy storage systems—are set to make distributed solar even more viable and appealing. Particularly, the best batteries for solar system are a game-changer as they tackle the intermittent nature of sunlight, providing a smoother, more reliable energy supply.

Policy Innovation

The next big push in distributed solar will come from clever policy innovations. Policies that encourage the integration of batteries, push for grid upgrades, and back community-focused energy initiatives will be crucial.

Community Engagement

Getting communities on board and boosting local control over solar projects is key to crafting a strong and fair energy future. By promoting a deep sense of ownership and active participation, communities become central to spreading distributed solar and sharing its benefits far and wide.

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To conclude, the push for distributed solar is really picking up steam. With each state bringing unique contributions to the table through supportive policies and local projects, we're seeing a boom in innovations and investments that stretch the limits of what's possible with solar energy. As we progress, expect this trend to take center stage in building a world where clean energy generation is in everyone's hands.


Key takeaways

Key Highlights

  • Significant Growth: In 2023, 31% of the U.S.'s new 29 GW solar capacity was distributed solar.
  • Definition: Distributed solar includes on-site installations typically under 5 MW.

Benefits of Distributed Solar

  • Local Control: Generates electricity close to where it's used, reducing transmission losses.
  • Cost Savings: Lowers energy bills and reduces greenhouse gas emissions.

State Policies Driving Adoption

  • Net Metering: Allows selling excess power back to the grid.
  • Community Solar Programs: Benefits those without suitable rooftops.
  • Renewable Portfolio Standards (RPS): Mandates a percentage of energy from renewables, including distributed solar.
  • Simplified Interconnection Rules: Eases the connection process to the grid.

Leading States

  • California: Leads in overall and distributed solar capacity.
  • Hawaii: High energy costs and abundant sunlight drive adoption.
  • Massachusetts: Strong incentives and community solar programs.
  • New York: Focus on modernizing the grid and promoting distributed energy.

Future Outlook

  • Technological Advancements: Improvements in solar efficiency and storage.
  • Policy Innovation: Support for integrating batteries and grid upgrades.
  • Community Engagement: Local control and participation will expand reach.


Effective state policies and community support are rapidly driving the growth of distributed solar, making it a key player in the U.S. energy landscape.


  • Institute for Local Self-Reliance (ILSR)
  • Solar Energy Industries Association (SEIA)
  • Energy Information Administration (EIA)
Jun 14, 2024
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