We at Solar Tribune confess to being unabashed solar enthusiasts, but even the most casual of solar industry observers could tell you that the industry is on the cusp of something great. The ‘roaring 20’s’ that this country experienced in the previous century will take on a whole new meaning as the solar industry soars to new heights this decade.
2020 Was Solar’s Best Year Ever
Even in the face of unprecedented challenges brought on by the COVID-19 pandemic, the solar industry enjoyed its best year ever in 2020, this according to the “U.S. Solar Market Insight 2020 Year-in-Review” report released in March by the SEIA and Wood Mackenzie. A record 19.2 GW of new solar capacity was added in 2020, breaking the previous high-water mark of 15.1 GW set back in 2016.
This note from the SEIA’s press release is perhaps the most remarkable detail of the whole report:
“The 8 GWdc of new installations in fourth quarter 2020 marks the largest quarter in US solar history. For perspective, the US solar market added 7.5 GWdc of new capacity in all of 2015.”
In 5 short years, the solar industry is now adding more capacity on a quarterly basis than it used to add annually! And this type of explosive growth may now be the norm, according to SEIA projections.
The SEIA/Wood Mackenzie report predicts that the solar industry will reach a landmark annual installation rate of 50 GW in new solar capacity by 2030. The result will be an addition of more than 324 GW of solar capacity over the next 10 years, quadrupling from current levels.
The ambitious projections are in part a result of broader trends among customers, utilities, and corporations to decarbonize the grid, in addition to the improved solar economics that make the energy source cheaper by the year. Increased support from the federal government and a number of state governments is putting additional wind at the sails of the industry. In fact, the report credits the two year extension of the federal investment tax credit (ITC) with increasing the solar deployment forecasts from 2021 to 2025 by 17%.
Feds Pledge to Cut Solar Costs
If the solar industry is going to take off in the next 10 years, like the SEIA predicts, it will be in no small part due to pro-solar public policies taking hold across the country that provide a significant accelerate to fueling broader solar adoption. Just this month, there were significant pronouncements by the federal government and several state governments on that exact front.
The U.S. Department of Energy announced in March that they are setting a new target to cut the cost of solar energy by 60% within the next ten years. The goal was described as necessary to accelerating solar deployment across the country and achieving the Biden Administration’s goal of a 100% clean electricity grid by 2035.
DOE is putting $128M in federal funding behind the effort, which will go to targeted initiatives designed to advance already promising solar technologies. Funding priorities through DOE’s Solar Energy Technologies Office (SETO) will include:
$40M for Perovskite R&D: DOE awarded funding to 22 R&D projects across the country “that will advance perovskite PV device and manufacturing research and development—as well as performance through the formation of a new $14 million testing center.”
$3M for Perovskite Startup Prize: Funding for this program will allow for more rapid commercialization of promising Perovskite technologies by providing critical seed funding to early-stage companies involved in the space.
$20M for Cadmium Telluride PV development: The National Renewable Energy Laboratory (NREL) was awarded $20M to advance research and domestic production of Cadmium Telluride PV solar cells, a promising thin-film solar technology that is cheap and efficient.
The feds aren’t the only ones putting their money where their mouth is when it comes to encouraging the expansion of the nation’s solar energy generation capabilities. Governors in Pennsylvania and Massachusetts likewise made waves by announcing historic efforts to accelerate their respective state’s transition to a cleaner energy future.
Pennsylvania Governor, Tom Wolf, recently committed to a 191 MW solar procurement via planned expansive solar arrays across nearly 2,000 acres of Pennsylvania farmland. This represents the largest such solar commitment made by any state in the country. Pennsylvania plans to purchase at least half of all electricity used by the state’s government buildings from the planned solar arrays. The plan is for the arrays to be producing power by Jan 1, 2023.
Just days ago, Massachusetts Governor Charlie Baker signed a sweeping clean energy bill into law that establishes 2050 as the state’s benchmark to reach net-zero for greenhouse gas emissions. Among other things, the bill expands access to solar net metering credits and removes barriers in current solar policies that limit solar energy access to low-income communities, thus allowing for more equitable access to renewable energy for all residents of Massachusetts.
Perfect Storm of Opportunities in 2020-2030
The solar industry’s promising near-term future is owed in large part to a confluence of factors that are simultaneously at play and helping to fuel widespread solar adoption across multiple sectors. These factors can generally be summed up as follows:
Historic government support for solar initiatives: As noted in previous articles, President Biden has made combating climate change an administration-wide priority. If even a fraction of his campaign promises and post-election commitments come to fruition, then his Administration will still clearly be the most pro-solar Administration we’ve ever seen in this country. The previously mentioned DOE funding announcement is a sign of what’s to come. As public opinion continues to shift in favor of renewables, expect lots of states (see Pennsylvania and Massachusetts) to follow suit.
Solar costs continue to plummet: It was just a handful of months ago when solar energy was officially dubbed the cheapest form of electricity in history. This comes as little surprise as the costs associated with solar energy systems have plummeted in recent years. The unmistakable downward trend will continue this decade, making solar more and more affordable for the average homeowner.
Residential demand fueled by desire for energy resilience: The recent energy grid crisis in Texas, sparked by a rare cold snap in the Deep South, is just the latest reminder of the perils of being beholden to an antiquated energy grid. Similar situations were experienced in Puerto Rico after Hurricane Maria and in California after its recent rash of devastating wildfires. The fact of the matter is that climate change is making these otherwise rare weather events far more commonplace. Look for more and more homeowners in the next several years to look to the solar energy market to achieve a degree of energy independence from an increasingly unreliable energy grid.
Corporate-driven demand: Large corporations continue to be a major driver of increased growth in the U.S. solar market as more and more major corporations adopt ambitious renewable energy goals. Annual installed corporate solar capacity (both on-site and off-site) in 2019 was 1,283 MW, a nearly 75% increase from just 4 years earlier. Expect that trendline to only continue as environmental sustainability continues to become a point of emphasis in corporate boardrooms across the country.
When taken together, these factors combine to set the solar industry up for some historic achievements to take place over the next decade. It is no wonder that the SEIA and Wood Mackenzie are so bullish on what the possibilities are for the industry in upcoming years. The forecast for the industry is good news for humankind, as we cannot afford to lose any more ground in the fight to reverse the effects of climate change. Bold actions and big results will be needed.
Cover Photo Source: Forbes
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