The most powerful states for solar

FORTUNE -- It turns out that subsidies -- not the sun -- are what really drive solar projects. Photovoltaic plants simply aren't cost-efficient without tax breaks and other government carrots. California leads the country in photovoltaic projects, thanks to a 2006 act that offers rebates to homeowners and businesses that go green. But the Northeast is also, somewhat counterintuitively, a big solar player. In 2009, 10 Northeastern and Mid-Atlantic states formed an alliance that aims to cut carbon dioxide emissions 10% by 2018. New Jersey is the fastest-growing state in terms of solar development. The sunny South has meaningful solar projects only in Florida, North Carolina, and Texas. The same solar-in-the-shade phenomenon is happening globally: Germany and Japan -- not exactly hotbeds of, well, heat -- lead the world in photovoltaic projects. And until solar power is as cheap to produce as fuels like gas and coal, it is likely there will continue to be nothing new under the sun.

California outshines all others when it comes to photovoltaic capacity, with about 900 megawatts. The state offers benefits to solar adopters, including tax rebates and financial support for new solar projects.

An early adopter of solar energy, Colorado ranks No. 22 in population but No. 3 in installed photovoltaic capacity. Up next: Studies suggest that Colorado can export its solar energy to states hungry for sun-fueled power..

Though its biggest city, Newark, boasts only 93 sunny days a year (compared with L.A.'s 186 sunny days), New Jersey generates a whopping 246 megawatts of photovoltaic power, second only to California. Why? Its renewable-energy policy has a special carve-out that encourages solar energy.