• GTM Research forecasts that 16 gigawatts will be installed
  • Growth driven by falling panel prices, federal incentives

U.S. solar installations are expected to more than double this year, driven by falling equipment prices and federal tax credits.

Solar companies will add 16 gigawatts of panels in the U.S. in 2016, up from 7.3 gigawatts in 2015, according to a study released Wednesday by the Solar Energy Industries Association, a Washington-based trade group.

Solar power has already increased tenfold over the past five years in the U.S., accounting today for 1 percent of the nation’s electricity, according to SEIA. The group expects sunlight to generate as much as 3.5 percent of the country’s electricity by 2020.

“It’s a really big moment for the industry,” said Justin Baca, the group’s vice president of markets and research. “Solar is here as a major contributor.”

A key reason solar is booming is the cost of panels, which have plunged 67 percent since 2010, according to SEIA. In the months leading up to 2016, companies lined up record numbers of projects to take advantage of a 30 percent federal tax credit that had been set to expire at the end of the year. Congress voted in December to extend the program through the end of 2021.

Large utility-scale projects will account for roughly 75 percent of new installations this year, adding 12 gigawatts, according to the study, which was conducted by Boston-based GTM Research. That’s nearly triple the 4.2 gigawatts added in 2015. Residential installers will add 2.8 gigawatts, up from 2.1 gigawatts last year.