Editor's note: This post was originally published on September 28, 2014 and has been updated for comprehensiveness.

Did you know that in the last decade alone, the solar industry has experienced an average annual growth rate of 24%?

While the adoption of solar energy was slow to start, technological advances, reduced reliance on fossil fuels, and a number of other factors have contributed to the increased adoption of solar in both commercial and residential applications. We detail them below.

1. Cost Savings

One of the most significant factors driving growth in the solar industry is the continuous decline in the cost of solar technologies, including photovoltaic (PV) panels and solar cells. In addition, over the last decade, the cost to install solar has dropped by more than 50%. Advancements in manufacturing processes, improved materials, and economies of scale have all contributed to reducing the overall cost of solar installations.

Additionally, while the initial financial investment can be high, PV systems offer nearly free energy and relatively low maintenance costs. In fact, commercial businesses that use solar can reduce their energy costs by up to 75%.

2. Government Incentives and Policies 

Governments around the world are offering attractive incentives and policies to promote the adoption of solar energy. These include tax credits, subsidies, feed-in tariffs, and renewable portfolio standards, all of which encourage businesses and homeowners to invest in solar installations. In the United States, for example, the Inflation Reduction Act, an extension of the Solar Investment Tax Credit, is designed to offset the costs of solar adoption through direct tax credits and incentives for advanced energy projects, renewable energy projects, and more.

3. Technological Advancements

Ongoing research and development efforts have led to technological advancements in solar energy, making it more efficient and reliable. Innovations in solar cell materials, energy storage solutions, and smart grid integration have further boosted the attractiveness of solar energy. As a result, the cost of solar panels today is 94% cheaper than in 1989.

Plus, as U.S. household electricity consumption declines and traditional energy costs increase, technological and energy efficiency advances are helping make distributed solar an even more attractive option.

4. Climate Change and Environmental Awareness

The growing awareness of climate change and its impact on the environment has led to an increased demand for cleaner and renewable energy sources like solar power. Consumers, corporations, and governments are seeking ways to reduce carbon footprints, and solar energy provides a viable solution.

Additionally, policies like the SEC’s proposed climate rule could soon require public companies to disclose information on their direct impact on climate risk. This rule has organizations eager to adopt new technology to help improve their environmental impact and better track their data.

5. Energy Independence and Security

Solar power offers the potential for increased energy independence, as it can be harnessed locally and doesn't rely on imported fuels. This aspect becomes particularly appealing to countries seeking to diversify their energy sources, reduce greenhouse gas emissions, and enhance energy security. Another added benefit is avoiding imported fossil fuel delays as a result of supply chain disruptions.

6. The Rise of Residential, Community, and Group-Owned Solar

According to the U.S. Department of Energy, community solar is any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, nonprofits, and other groups.

In other words, this form of solar adoption allows neighbors to share both costs and outputs, while residential solar leasing enables households to rent the means to energy independence. Both are likely to expand the adoption of solar among consumers.

7. The Evolution of Solar Storage

While battery storage prices have dropped over the years, solar storage is expensive, with costs around $800 to 1,500 / kWh. Reducing the cost of solar storage is crucial to off-grid solar deployment and would maximize utility companies’ profit potential. On the consumer side, affordable solar storage could allow individuals to secure reliable off-the-grid power. Investments in technology and innovation could make great strides in driving down prices.

Reshore Your Energy and Your Solar Parts

While adopting solar energy can help you reduce imported fossil fuel dependence, reshoring or onshoring your solar components can help prevent unexpected delays, too. Download our free white paper, “The Benefits of Reshoring and Onshoring for U.S. Manufacturers,” to find out how you can improve reliability, exceed customer expectations, and reduce costs by domestically acquiring your solar parts.