Demand for solar energy in the United States is expected to grow 20 percent this year, building the market up to a record 4.3 gigawatts, according to an industry analysis report.

NPD Solarbuzz released its quarterly report on the North American solar market and found that four states will make up 70 percent of the demand for solar photovoltaic panels in the country – California, Arizona, New Jersey and North Carolina.

Most of the market growth in the second quarter of 2013, according to the report, is coming from utility-scale solar development, which will account for 68 percent of new solar installed in the top four states.

Residential rooftop solar installations make up 18 percent of the demand and larger commercial installations claim anther 14 percent.

“The strong commercial and utility-based solar PV being deployed in the US is stimulated by state specific mandates that require solar to meet target levels, or carve-outs, of total energy production,” said Chris Sunsong, analyst at NPD Solarbuzz. “Meanwhile, residential demand is being driven by new third-party ownership models that allow homeowners and businesses to install PV systems with minimal upfront commitments.”

While those four states are dominating the market, they’re hardly the only ones with big growth in solar on the horizon.

Texas and New Mexico are also expected to drive utility-scale solar growth this year, according to the NPD report.

Hawaii, Massachusetts, Nevada, New York and Ohio are also expected to be major players in the growing solar market in 2013 with some significant announcements planned for the end of the year.

Demand for new solar projects is expected to climb to 2.5 gigawatts in the U.S. in the second half of 2013 and is forecast to exceed 5 gigawatts in 2014. That represents a 70 percent compound annual growth rate of 70 percent since 2009, according to NPD.

While the industry growth has historically been concentrated on the East and West coasts, interest in renewable energy has spread across the country with several Midwestern and Southern states adopting renewable energy portfolio standards with carve-outs for solar. As a result, six of the 10 fastest growing solar markets are in those seemingly less likely regions of the country.

While the solar market is growing dramatically, analysts warn that there are factors that could slow growth.

“The success of federal incentives and aggressive renewable portfolio standards that were intended to stimulate domestic solar PV installations in the US is now coming under increased scrutiny at the state level", Sunsong said.

On top of that, some of the states with the most solar demand are dependent on a trade market for Solar Renewable Energy Certificates that becomes increasingly weak the more solar is installed.