Industry Report: Solar Panel Installation

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Industry: Solar Panel Installation

Naics: 238210

Private Company Multiples

Industry Overview

The solar power industry is experiencing rapid growth. Revenue for solar installation services has grown at a 7.9% CAGR to reach $21.8 billion over the past five years, with a 4.9% increase in 2024 alone. These numbers indicate solar is moving from a niche market to the mainstream.

This growth is driven by multiple factors. Skyrocketing electricity prices are making solar panels more attractive to consumers. There's also increasing awareness that solar energy reduces carbon emissions.

The investment tax credit (ITC) has been crucial for industry growth. The 30% tax credit has made solar financially viable for many consumers. The Inflation Reduction Act extended this 30% credit to 2032, providing long-term stability for the industry.

State and local governments are offering additional incentives, further boosting solar adoption. The residential construction boom in 2020 and 2021 also contributed, with new houses incorporating solar panels to meet LEED certification and green initiative targets.

Panel prices have dropped due to low-cost imports from Asia and a 24-month tariff pause. This allowed installation services to lower their prices, making solar more accessible. Despite charging less, profits remained stable due to increased installation volume.

The industry's future outlook is positive. The continuation of ITCs provides a stable foundation for growth. Commercial and government buildings are adopting solar to meet ESG standards and green goals.

Solar panel installation revenue is projected to grow at a 4.2% CAGR, reaching $26.7 billion by 2029. This growth will create jobs, with contractors hiring more employees to handle new projects.

Key Financial Metrics

Income Statement Benchmark

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