The pace of change quickens
As of the end of 2020, solar power continues to be a relatively small portion of the energy supply of the United States. Just under 3% of the country’s power comes from the sun. Now, before the naysayers dismiss the industry as insignificant, let’s point out the fact that solar was under 1% just four short years previous.
The direction and speed of change are undeniable. I refuse to say “the future of solar power is bright” because that’s hokey, but well… it’s kind of true.
Solar is becoming cheaper than coal
First and foremost, the technology of renewable energy continues to improve, and that improvement means lower costs. In addition to refinement of the technology itself, the economies of scale made possible by wider adoption further bring down the costs of renewable energy.
According to Bloomberg, in most countries today it is cheaper to build a new solar or wind farm than a new fossil fuel power plant. Bloomberg also estimates that by 2025 building new renewable energy power sources will be less expensive than even just maintaining old fossil fuel plants. What’s more, “solar is on track to become the cheapest form of power ever”!
Truly a watershed moment, especially for those who are less concerned about the environmental impacts of power production than the economics of it.
One of the most significant and impactful trends is just society’s level of familiarity with solar technology. As more governments at the city, state, and national levels incentivize the installation of solar power cells, the sight of buildings – both residential and commercial – covered in black panels becomes more familiar. The more people are familiar with it, the more reasonable it will seem to invest in it.
Word of mouth, as well, has a snowballing effect as people share their experiences of saving money by installing their own systems. In a 2019 survey, 6% of residences in the U.S. at that time had home solar systems, but another 46% “have given serious thought to adding solar panels at their home in the past year.”
This is both a strong indicator that incentives work and that even more people will be taking the plunge soon.
The political future of solar power
Some of what the future holds for solar power depends upon the actions of our political leaders. With U.S. leadership at the federal level swinging so wildly between the poles of environmental advocacy, it’s often been left to state and local governments to decide how solar power is governed and incentivized. As noted, it is clear that government incentives work.
Of course, there are some things that can only be done at the federal level, like the signing of international treaties that coordinate renewable energy efforts and re-entry into those treaties that the government has chosen to ignore, e.g. the Paris Accord. The incoming Biden administration has signaled a prioritization of climate action, so it seems likely that a more active federal hand in renewable energy issues is in our near future.
Reductions in incentives
One less-than-rosy issue playing out now is the significant reductions in federal incentives. 2020 saw a 26% federal tax credit, in 2021 that credit was at 22%, and in 2022 it will disappear entirely. It remains to be seen if further federal legislation will extend the incentives, though it’s unwise to pin our hopes on that possibility.
It’s also possible (and probably more likely) that local and state governments could step in to make up some of the difference yet again. More incentives are great at any level, but a more complicated web of incentives from various levels of government could make things more confusing and difficult for manufacturers, installers, and customers alike.
It’s likely, though, that sales strategies for residential installers will need to shift. There are still plenty of good reasons for people to utilize solar systems – it may just make the pitch a little bit harder.
Home power storage
An important trend within the residential market is the use of home batteries to store some of the power produced by a home’s solar panels. A home battery allows a homeowner to hold onto some of the power they’re producing for a rainy day, figuratively and occasionally literally.
In places like California where rolling blackouts are likely the new normal, batteries give people the ability to take control of their power usage.
And with many markets now seeing spikes in energy prices at peak times during the day, batteries allow consumers to significantly reduce their power bills by strategically choosing when they draw from the power company.
Perhaps the most sci-fi of the ideas I’ll present here, solar roads aren’t just theoretical. Pilot programs are being tested here in the U.S. and some are already being built in China. The idea is to convert the eye-sore pavement that covers so much of our land into something even more practical: a network of power production. (The key, of course, is creating solar panels that can withstand the wear and tear that roads experience.)
And it should go nicely with your solar-powered car, which is also coming to a garage near you.
The tipping point
Due to the changes in efficiency and cost, we are currently living through the tipping point in which the movement toward renewable power picks up speed. It’s important to remember, though, that the transition will take time. We’re speaking about decades here, not years.
Regardless, there is much cause for optimism for the future of the solar industry.