Rooftop solar power is shining brighter than ever across the United States, with small-scale solar photovoltaic systems—those under 1 megawatt—producing an astounding increase in energy generation over the past decade. The U.S. Energy Information Administration (EIA) reported that overall generation from these systems has soared from roughly 18,812 gigawatthours (GWh) in 2016 to an impressive 92,979 GWh in 2026. For small business owners, this growth in solar energy represents both an opportunity and a consideration for future operations.
Small businesses in states blessed with abundant sunlight, such as California, Arizona, Texas, and Florida, have seen significant advantages from adopting solar technology. These regions not only lead the country in solar generation, but they have implemented a variety of state-level incentives designed to encourage small business participation in solar energy initiatives.
“California accounted for 37% (34,411 GWh) of total U.S. small-scale solar generation in 2025,” EIA noted, indicating the scale of potential savings for businesses investing in renewable energy. In 2025, California’s rooftop solar generational capacity rose to 20 gigawatts, driven by an 8% growth in installations. With the state’s previous Net Energy Metering (NEM) 2.0 program encouraging solar investment through better compensation, small business owners had compelling reasons to capitalize on solar opportunities before the transition to NEM 3.0 took effect in April 2023.
In contrast, even states with lower solar resources are finding ways to capitalize on the solar boom. New York, for example, ranks fifth in the nation for rooftop solar generation, thanks to supportive technology improvements and state incentives. These attributes showcase the increasingly viable nature of rooftop solar, especially for small businesses looking to reduce energy costs and enhance sustainability.
For Arizona businesses, the solar initiative is similarly beneficial, owing to a 25% state income-tax credit and various incentives that bolster investment in rooftop systems. With small-scale solar generation in Arizona at 5,795 GWh in 2025—over 6% of the national total—small business owners can leverage these incentives to offset initial installation costs and maximize their energy independence.
Texas and Florida have also joined the solar race. Florida’s generation grew from 205 GWh in 2016 to about 5,198 GWh last year, while Texas saw an increase from 391 GWh to 5,408 GWh during the same period. Both states’ property tax exemptions further encourage investments in solar energy, demonstrating the localized benefits of renewable power for small businesses.
Yet, the trend isn’t without its complexities. While the overall generation from small-scale solar systems continues to grow, the rate of that growth has begun to decelerate since 2022. Business owners should recognize that this could herald a peak period for incentives, making the timing of their investment crucial. Additionally, the future may bring changes to existing incentive structures—such as the transition from NEM 2.0 to NEM 3.0 in California—which could impact the financial advantages of going solar.
The estimation of solar generation remains a challenge as electric utilities struggle to capture accurate data from distributed systems. As a result, small business owners interested in harnessing solar energy should pay close attention to these dynamics in their local markets and stay informed about the various programs and incentives available to them.
Ultimately, for many small business owners, investing in rooftop solar systems represents a strategic step toward sustainability. Not only does it offer the potential for considerable energy savings, but it also contributes positively to a business’s public image as a green, responsible entity.
With increasing competitive pressures in today’s market, having a reliable and sustainable energy source may very well give small business owners the edge they need. As interest in renewable energy solutions continues to rise, now could be the ideal time to consider the substantial benefits of small-scale solar generation.
For more in-depth information from the EIA, explore the original article here.
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This article, "U.S. Rooftop Solar Generation Soars 394% in Decade, Led by California" was first published on Small Business Trends