NEW YORK (TheStreet) -- From the standpoint of building out the solar energy industry, the final quarter of 2013 was huge, topping off its best year ever, according to an industry group report.

While still a decidedly small piece of the U.S. energy puzzle, solar is starting to close in on significant market share, claiming a full 29% all new electricity generation capacity in 2013, up from 10% in 2012, according to a Solar Energy Industries Association report released Tuesday, making new installations of solar second only to natural gas.

Wind power, by contrast, hit a speed bump with the expiration of a federal tax credit at the end of 2012. Wind power dropped to 7% of new energy installations in 2013, vs. 41% in 2012. New wind power installations are set to rise again in 2014, but at a more subdued rate.

In solar, one of the big headline grabbers of 2013 actually came online in the first quarter of 2014:  BrightSource Energy and NRG Energy's $2.2 billion Ivanpah plant, touted as the world's largest solar power plant. It now has a capacity of 392 megawatts. The plant uses concentrated solar thermal power, where mirrors reflect sunlight to centrally located steam turbines that generate electricity from the heat. A significant number of other CSP facilities are being completed and are scheduled to come online in 2014, but many are saying that CSP technology is on the way out before it can be fully phased in.

In contrast to CSPs, photovoltaics generate electricity directly from contact with the solar radiation. The PV panels offer a lot of flexibility, as they can be installed directly on site or used in centralized distribution facilities.

Historically, cost has been a big issue for PV panels, but that is changing rapidly. According to SEIA, average system prices for solar continued to drop steeply to $2.59 a watt in the fourth quarter of 2013, down over 14% from a year earlier and vs. $8 in 2009. For utilities, average system prices nationwide fell below $2 a watt, to $1.96 in the fourth quarter.

Cost aside, PV panels still lose to CSPs on two key points. First, PV panels typically have efficiency ratings of well less than 20%, while efficiency for CSPs is upward of 30%. Second, current CSP plants can store thermal energy for up to 16 hours, even after sunset. Improving battery technology and steadily increasing efficiency in solar cells and solar panels should bring those aspects of PVs more in line with CSPs in coming years.

Quoted in the SEIA press release, Shayle Kann, senior vice president of Greentech Media Research said, "2013 offered the U.S. solar market the first real glimpse of its path toward mainstream status. The combination of rapid customer adoption, grassroots support for solar, improved financing terms, and public market successes displayed clear gains for solar in the eyes of both the general population and the investment community."

The SEIC report estimates total solar capacity will grow another 26% in 2014.

And it has plenty of room to grow. Even with all that new activity, solar still currently accounts for only 8.1 gigawatts or 0.7% of current total installed electric-generating capacity in the U.S., according to the Federal Energy Regulatory Commission. That figure likely does not include most of the residential and small commercial installations that make up a sizable chunk of solar power nationally, but no matter how you look at it, solar's piece of the pie is small.

But it is growing and investors are taking note. The NYSE Bloomberg Global Solar Index is up over 21% year to date.

Recent corporate adopters of solar include include Wal-Mart (WMT - Get Report), CostCo (COST), Kohl's  (KSS - Get Report), Apple (AAPL - Get Report) and Ikea. According to Wal-Mart's corporate Web site, the discount retailer has "150 solar installations in seven countries, delivering 71 million kilowatt hours of energy annually to our stores, clubs and distribution centers."

In addition to solar installations at facilities around the world, Apple has the largest user-owned solar panel array in the U.S., a 20-megawatt power facility at its data center in Maiden, N.C. 

Among photovoltaic companies in the U.S., SunPower (SPWR - Get Report) operates in utility and plant construction but also has a residential unit that is second only to SolarCity (SCTY) for domestic installations.

Shares of SolarCity recently got a boost from the announcement by its sister company, Tesla (TSLA - Get Report), that the car maker would build a "Gigafactory" for the construction of new batteries, including the stationary units SolarCity is rolling out for use in business and residential installations.

FirstSolar  (FSLR - Get Report), the largest panel maker in the U.S., recently disappointed on earnings and revenue for the fourth quarter and lowered first-quarter guidance. However the company offered that the lowered guidance should not affect full year results as it was expecting revenue later in the year for projects it is building now.

Shares of SunPower closed down 1.5% in Wednesday's session at $35.36. Shares of SolarCity closed down 2.7% at $80.42. Shares of FirstSolar closed up 0.76% at $58.15

-- Written by Carlton Wilkinson in New York