The White House outlined a new plan on Wednesday that aims for solar energy to supply nearly half of the nation's electricity by 2050. According to the Solar Futures Study, only 3% of the country's electricity came from solar panels as of 2020. This ambitious plan proposes initiatives to make solar energy make up 40% of U.S. electricity by 2025 before ultimately reaching 45% by 2050.
The study's report from the U.S. Department of Energy Solar Technologies Office, alongside the National Renewable Energy Laboratory, said that in order to meet the Biden administration's goals, solar panel usage would have to increase by 30 gigawatts per year on average until 2025, by 60 GW per year from 2025 to 2030 in order to reach 1,000 GW by 2035, and, finally, reach 1,600 GW by 2050. That total is more electricity than is currently consumed in all U.S. residential and commercial buildings.
A standard American household needs between 20 to 25 solar panels to run entirely on solar energy, according to CNET. Moreover, if 1 GW is equal to about 3 million solar panels, 1 GW could potentially power over 100,000 homes. However, that will require at lot more solar panels: enough to cover 0.5% of the land surface area of the contiguous United States, according to the report.
"The study illuminated the fact that solar, our cheapest and fastest-growing source of clean energy, could produce enough electricity to power all the homes in the U.S. by 2035 and employ as many as 1.5 million people in the process," said Secretary of Energy Jennifer Granholm in a press statement. "Achieving this bright future requires a massive and equitable deployment of renewable energy and strong decarbonization policies--exactly what is laid out in the bipartisan infrastructure Investment and Jobs Act and President Biden's Build Back Better agenda."
To meet the goals of this solar energy plan, heavy spending across multiple industries will be needed. In the last decade, solar has experienced an average annual growth rate of 42%, according to the Solar Energy Industries Association (SEIA). Falling costs and supportive tax incentives, coupled with increasing demand across both the public and private sectors, has led to more than 100 GW of solar capacity installed nationwide, which is enough to power 18.6 million homes, SEIA reports.
For investors seeking to add solar energy plays to their portfolio as the White House works to boost the nation's clean energy infrastructure, exchange-traded funds (ETF) are a great option. Popular solar energy ETFs include Invesco Solar ETF (NYSE: TAN), iShares Global Clean Energy ETF (NASDAQ: ICLN), and SPDR S&P Kensho Clean Power ETF (NYSE: CNRG).