Installations of solar energy systems double

Solar photovoltaic systems were installed in 51,176 U.S. homes in 2011.

NEW YORK (CNNMoney) -- When it comes to solar power, more and more Americans are seeing the light.

Installations of solar energy systems in the U.S. more than doubled in 2011, according to a new report, fueled in part by declining solar panel costs.

The U.S. added a record 1,855 megawatts of photovoltaic capacity in 2011, a 109% increase versus the year prior, said GTM Research and the the Solar Energy Industries Association, a national trade group.

The report projects that new installations will increase further to more than 2,800 megawatts in 2012.

Average photovoltaic system prices fell 20% last year, with a glut of solar panels hitting world markets.

U.S. panel manufacturers like First Solar (FSLR) and the now-bankrupt Solyndra have been hurt by the falling prices, with some in the industry complaining that Chinese manufacturers are selling solar panels below cost, benefiting from government support.

In addition, subsidy cuts in European countries struggling with the continent's debt crisis have dampened solar demand there.

The report also credited improved installation efficiency and a federal grant program with spurring growth in the U.S. market. Commercial projects led the way last year with some 800 megawatts worth installed, followed by 758 megawatts worth of utility projects and 297 megawatts worth of residential installations.

Last year's new installations represented 7% of all new photovoltaic capacity worldwide, up from 5% in 2010. At year's end, the U.S. had enough solar capacity to power nearly a million households, the report said.