Although the solar photovoltaic (PV) industry was expected to consist mainly of solar farms/utility scale installations, the industry is seeing a rise in distributed solar. Distributed solar refers to electricity that can be produced at or close to the place where it is used. Distributed solar has the potential to offset the demand of peak electricity in addition to helping stabilize the local grid.
The changing solar market and the progression from solar photovoltaic (PV) utility installations to distributed solar PV installations can be attributed to the lower cost of PV panels, advances in technology, and the development of effective residential and commercial financing models. Statistics show that in 2012, annual distributed solar systems accounted for about 69% of all solar PV systems worldwide. In North America, mainly in the United States, distributed solar grew 42%. Worldwide, distributed solar PV installations are projected to generate around $540.3 billion in revenue from 2013 to 2018.
The United States is striving to reach grid parity, which occurs when energy from the PV solar panels can generate electricity at a cost that is less than or equal to the price of purchasing power from the electricity grid without the use of government incentives. Reaching grid parity will be significant for the solar PV industry, especially for distributed solar because it will allow for solar power to become a competitor for widespread development without the help from government subsidies.