A newly released report from the Interstate Renewable Energy Council (IREC) found that the there were 124,000 solar installations—including photovoltaics (PVs), concentrating solar power and solar thermal—in the U.S. in 2010. That’s an increase of 22 percent over 2009. And 2011 is likely to beat that.

Each of the leading states grew their solar installation significantly as well, according to the IREC report, U.S. Solar Market Trends 2010.

“The amount of PV capacity installed in Arizona, Colorado, Massachusetts, Nevada, New Jersey, New Mexico, Pennsylvania and Texas installed in 2010 was at least double the capacity installed in each state in 2009,” the report said. “California remains the largest U.S. market, with about 28 percent of the U.S. installed capacity completed in 2010. However, this is a significant drop in market share from the 49 percent recorded in 2009.”

New Jersey and California are likely to remain the top two states in terms of solar installations, said report author Larry Sherwood. IREC has been producing the report for four years now and monitoring the data for longer, he said.

Among the trends Sherwood saw for 2010 was significant adoption by utilities.

“I think the biggest change in 2010 is the growth in the utility-sector installations, which were pretty much non-existent five years ago,” he said. “I would say it’s likely to become the largest sector.”

However, Sherwood doesn’t expect growth in the utility sector to totally dominate the other solar markets, residential and commercial.

Although the federal incentives have helped spread the adoption of solar throughout the country, local solar incentives and rebates are also important to growing the solar industry, according to Sherwood.

“By where the installations are happening, you can see that they’re an important part of the package,” he said.

Looking forward, the growth trends are expected to continue in 2011, particularly in the utility sector, according to the report.

“Costs are going down and the supply of modules is pretty strong, so I think you’re going to see the prices continue to go down,” Sherwood said.

He also anticipates that the other costs related to solar, the soft costs, will come down, just not as quickly as the drop in module cost prices.

Pictured: Annual Installed Grid-Connected PV Capacity by Sector (2001-2010).