Whether you like solar power or not, there's no denying that the solar market is growing at a rapid pace in the U.S. A new report from Greentech Media and the Solar Energy Industries Association shows that growth is strong as new parts of the country emerge beyond the markets that have dominated solar in the past.

U.S. PV installations
The solar market installed 684 MW of power in the third quarter, down from 775.1 MW in the second quarter, but up 44% from a year ago. The fluctuation from quarter to quarter is largely dependent on the timing of utility-scale projects, which still dominate the industry.

Residential installations grew for the fifth consecutive quarter to just under 150 MW of installations. California led the way with 52.4 MW installed in the quarter.


Non-residential, or commercial, installations grew 35% from last quarter and are expected to reach a record of over 300 MW in the fourth quarter.

On the utility side, 21 utility projects were completed and there is now 2.1 GW of solar installed in the U.S. But don't expect a slowdown in projects because there is still 10 GW of power purchase agreements that have yet to be fully installed. The report noted that the backlog of projects has slowed as utilities in California have slowed the pace of power purchase agreements. This will likely have a negative impact on growth after 2015.

We're seeing strong growth in the U.S.; it's more than likely that over 3 GW will be installed in the U.S. this year. Utility-scale projects continue to dominate the number of MW, but it's important to note that residential solar is growing very consistently and has opened up new markets around the country. This is important as SolarCity looks to debut shares later this week.

Costs drop
If solar is ever going to be mainstream it is going to need to be cost-effective. There was even more progress on this front as module prices fell and the balance of system costs dropped.

Residential costs fell 4.4% sequentially to $5.21 per watt, non-residential fell 3% sequentially to $4.18 per watt, and utility projects fell a whopping 7.7% in just one quarter to $2.40 per watt. This was driven by big projects by First Solar , who is still the lowest-cost installer in the industry.

For a more visual effect, here is a table of GTM Research's cost per watt since 2010.

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Source: GTM Research Solar Insights

China not affected
The report from GTM Research says that the tariffs on Chinese module manufacturers shouldn't affect pricing or installations in the U.S. That's an incremental positive for Suntech Power , Yingli Green Energy , Canadian Solar , and Trina Solar . What it also shows is that falling sales at some of these companies means that they're in dire situations.

If the U.S., Japan, and India are growing and your sales are falling, then the drop is partly because your strategic position is deteriorating. Weak balance sheets are starting to catch up to these companies.

YGE Revenue Quarterly Chart

YGE Revenue Quarterly data by YCharts

Staying stateside
This report shows not only that the U.S. solar is growing, it shows that utility-scale solar projects by companies like First Solar will dominate the market for the next couple of years. The costs of these projects are already competitive with grid prices; as costs fall the value proposition will only improve.

If you're looking for our recommendation on how to play First Solar along with continuing updates and guidance on the company whenever news breaks, we've created a brand new report that details every must know side of this stock. To get started, just click here now.

The article U.S. Solar Market Continues Its Hot Streak originally appeared on Fool.com.

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend First Solar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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