When Will The Solar Boom Come to America?
An energy analyst at Deutsche Bank just recently concluded that by 2016, solar power will be as cheap, or cheaper, than electricity from the conventional grid in every state except three. That’s without any changes to existing policy. In other words, we’re only a few years away from the point where, in most of the United States, there will be no economic reason not to go solar. If you care about slowing climate change, or just moving toward cleaner energy…this is a huge development.
A Little Solar Boom History
In the past decade, the amount of solar power produced in the United States has leaped 139,000%. There are a number of key factors behind the solar boom: Cheaper panels and a raft of local and state incentives, plus a federal tax credit that shaves 30 percent off the cost of upgrading.
Reduced cost is probably the most obvious reason solar energy has blossomed across the United States in the last five years, but it has been substantially aided by improved technology.
The bottom line result is that during 2010 there was only 2,323 megawatts of solar production. As of February 2014, there was 12,057 megawatts of solar energy produced. That represents about 1.3 percent of the electrical production, as of February 2014 (a vast leap forward, but that still puts us well behind most of the developed world).
This Is Precipitating the Solar Boom
- The installed cost has dropped dramatically.
- Technology improvements explain some of the drop in cost. Solar panels have become more efficient, and arrays have gotten smaller.
- Battery storage has made gains not only in efficiency, but in type.
- Third-Party Financing is improving; investors are becoming more comfortable, bankers are more understanding of the model, there’s a lot of private equity, there’s a lot of debt that’s available that people are putting into the market.
- Permitting is becoming more streamlined.
- Marketing and culture are driving demand. Many companies are now incorporating public solar displays on their buildings and campuses to advertise their interest in renewable energy. Solar is becoming a status symbol. It is one of the few home improvements that get a 100% ROI.
Quick Facts: Around the Solar Boom
- The United States has the space and sunlight to provide 100 times its annual power demand with solar
- Enough sunlight strikes the Earth every 104 minutes to power the entire world for a year.
- Carbon savings from existing US solar panels offset the equivalent of 3.5 million cars.
- Solar workers now outnumber coal miners nearly 2 to 1.
- The cost of putting solar panels on a typical house has dropped nearly 70% since 1998.
- Average cost of solar panels per watt in 1975 was $75, today it is less than $1, and sometime during 2015 it is expected to be $0.43.
- Venture funding for solar in Q1 of 2013 was $126 million, in Q1 of 2014 it was $251 million.
- Solar accounted for 32 percent of the nation’s new generating capacity in 2014, this beat wind energy and coal for the second consecutive year. Only natural gas had a greater share of new generating capacity.
- The U.S. now has 20 gigawatts of installed solar capacity—enough to power 4 million U.S. homes—and we’re helping to reduce harmful carbon emissions by 20 million metric tons a year.
Interesting Market Information Related To the Solar Boom
The solar market has continued to see really impressive growth, this was true for established solar markets like California and Arizona to regions where solar is a relative newcomer, such as in Virginia, the Carolinas, Georgia, and Louisiana.
Some of the growth, especially in emerging solar states, was attributable to state incentives for residential and commercial solar; also the growing popularity of third-party leases offered by firms like SolarCity and Sunrun has had an impact. Large utilities have started to see this as a way to diversify their fuel portfolios.
North Carolina for 2014 was the nation’s No. 2 solar state by installations behind California, with 397 megawatts of new solar power coming online. It was followed by Nevada, Massachusetts, Arizona and New Jersey, all of which have well-established solar markets.
Other states rising in the solar ranks include New Mexico, Missouri and Maryland. New Mexico for the first time became a top 10 state for solar development thanks to its 88 MW gain in solar capacity last year.
New York, Texas and Hawaii also each added more than 100 MW of solar capacity in 2014; this helped secure their spots among the nation’s solar leaders. Elsewhere in the Southeast, Georgia and Tennessee saw marked increases in utility-scale solar projects, while Louisiana and South Carolina experienced sustained growth in the residential solar sector..