One basic principle holds true for every industry in every nation. When any industry grows, the economy benefits and currently this can make a big difference. Energy policies and initiatives in the United States once worked against the development of renewable energy industries. Powerful oil lobbies in Washington exerted their influence to hold back innovations that could harness inexhaustible resources like wind, water and sunlight.

Increasing instability in the Middle East, combined with the Obama Administration’s efforts to create incentives for renewable energy development is changing all that. Since President Obama took office in 2008, solar market growth has exploded in the United States. In a record-crushing surge, solar energy usage grew from 160MW in 2006 to more than 360MW in 2011, with a 66 percent growth rate between 2010 and 2011. Rates are on track to exceed even that number in 2012. These numbers make solar energy one of the highest-growth sectors in the U.S. economy.

The U.S. is, geographically, one of the best-suited countries in the world for solar energy collection and distribution. Great tracts of its desert southwest and the sunny regions of California and Florida are ideally suited for gathering sunlight, converting it to power and connecting it to the grid. More and more solar collection “farms” are being built in these regions.

At the same time, homeowners have been given tax incentives for installing rooftop panels and backyard systems that substantially lower the cost of the initial investment. Even in cloud-covered areas of the U.S. northeast, these systems work intermittently to cover electricity needs in everything from hot water heaters to lighting. As a result, the cloudy state of New Jersey has become one of the national leaders in numbers of households using solar energy, second only to California.

California is most certainly the hottest area for solar energy. The cities of San Diego and Los Angeles lead the way, with San Diego reaping 36.7 MW of photovoltaic solar power annually versus Los Angeles’ 36.2.

Each kilowatt-hour saved puts money in a homeowner’s pocket that can be spent on other goods and services, further stimulating the economy. Power that is collected over and above a home’s usage can be sold back to power companies and can reduce the overall cost of electricity to the communities they serve.

Logically, growth in demand has led to expansion of supply. The companies that manufacture photovoltaic tiles and panels are expanding right along with consumption, adding jobs that fuel local economies and increasing the tax bases for public services. As money flows through the industry, more innovations in technology are being invented, and more engineers are hired and rewarded for their work. Like the computer chip, solar energy technology is becoming smaller, more efficient, more powerful and less expensive.

This guest post was written by Frank Warburton. Frank has been part of the domestic solar panels industry for many years and believes in the importance of sustainability. He currently works for Spectrum Energy Systems in the UK.