Third-Party Solar Dominates: 72% Market Share in 2024

• US non-residential solar surges with 72% TPO in 2024, led by Nexamp. Expect continued growth as tax credits and rising electricity prices fuel the market.

Third-party ownership (TPO) of non-residential solar projects in the US increased to 72% in 2024, up from 69% the previous year, according to Wood Mackenzie. Nexamp led the TPO market with a 7% share, followed by Summit Ridge Energy at 6.5% and Standard Solar at 5.3%. The growth in TPO is attributed to the maturation of the tax credit transferability market, with expectations for TPO to reach 74% by 2026 before declining to 62% by 2029.

The US commercial solar market grew by 8% year-over-year, reaching a record 2.1 GWdc in 2024, driven by states like California, Maine, and Illinois. Wood Mackenzie forecasts over 11 GWdc of new commercial solar additions in the next five years, supported by rising electricity prices, emerging markets, and the Inflation Reduction Act. Commercial solar includes distributed projects with non-residential offtakers such as businesses, farms, schools, governments, and nonprofits.

What factors are driving the growth of third-party ownership in US solar projects?

• Increased availability of financing options for third-party ownership models.
  
• Attractive tax incentives and credits for solar investments.
  
• Reduced upfront costs for businesses and organizations opting for TPO.
  
• Growing awareness and demand for sustainable energy solutions.
  
• Improved technology and efficiency in solar installations.
  
• Rising electricity prices prompting businesses to seek cost-effective alternatives.
  
• Supportive state policies and regulations encouraging solar adoption.
  
• Expansion of community solar programs allowing broader participation.
  
• Enhanced risk management and performance guarantees offered by TPO providers.
• Strong partnerships between solar developers and financial institutions.