One of the most impactful solar energy trends has been its growth in just the last few years. Solar is THE fastest-growing sector of renewable energy since 2019. It generated 2.3% of total U.S. electricity in 2020, thus accounting for 43% of all new electrical-generating capacity.
Basically, nearly half of energy-generating projects are solar. Solar is in first place among all technologies for two years running.
1. Record-breaking solar installations
The U.S. broke records in both the steepest drop and the biggest bounce back in residential solar installs in 2020. That’s an obvious impact of COVID-19.
Residential installs dropped by 20% during the pandemic’s stay-at-home orders. In contrast, by the end of the year, solar bounced back in a big way, adding 19 GW of total solar power.
This trend is expected to continue in 2022.
Many analysts expect solar to rebound back to 2019 highs as renewable energy looks to outpace coal in terms of total energy production.
2. Batteries are more affordable than ever
This one might impact the industry the most among all solar energy trends.
Solar might be the fastest-growing industry in new energy generation. But, if asset classes are considered, battery storage is one of the fastest-growing sectors. In fact, by 2025, over 170 GW of new renewable capacity is scheduled for construction.
The big reason for that level of growth can be explained. Energy storage is seeing huge advances in efficiency and affordability. Now, energy storage is not just an economical addition for solar installs. It is also the most flexible. It allows energy storage to provide multiple functions, like ancillary grid services and on-demand power.
That’s probably main reason behind the solar battery growth. We’re seeing a higher market share of residential battery installs, which is a true benchmark of affordability and efficiency.
According to the U.S. Energy Storage Association, new battery-storage capacity in the U.S. doubled in the third quarter of 2020 alone. Moreover, representing over 25% of all contracted projects, 23 GW of energy storage will be paired with solar in utility-scale operations.
This pairing of new solar installs and battery storage systems is still new. But, the growth over the next five years should be huge. The SEIA predicts that by 2025, nearly 25% of all behind-the-meter solar systems will be paired with storage, compared to fewer than 6% in 2020.
3. Solar panel efficiency like we’ve never seen before
Solar panels see a modest increase in efficiency in most years, just like any technology,. This year, the average panel conversion efficiency has skyrocketed. This is from 15% to well over 20% in most modules.
Even though it does not sound like much, when adjusted over the lifespan of a panel, that 5% efficiency boost drastically increases your ROI and helps repay the upfront installation cost much sooner. Usually, most silicon-based solar panels cover their cost within 2 years. Now, payback time has reduced to less than 1.5 years with efficiency ratings above 20%.
It is not just efficiency that’s improved in recent years. The power rating has also improved. The latest efficiency jump allowed standard, 60-cell panels to increase from 250W to 370W. As efficiency improves, we should see even larger power output ratings in the near future, like most solar energy trends.
4. More diverse supply chain
A lot of PV panels and inverters are manufactured overseas. The COVID-19 painfully showed the weakness behind our global reliance on a few major manufacturers.
The good news is that U.S.-based module manufacturers are increasing their market share, achieving a 10-year high of 19.8% in 2019. But, price competition remains the biggest challenge. It simply costs more to produce solar materials in the U.S. The inevitable fact is that this cost passes down to the consumer.
But there is light at the end of the supply chain. Awareness around our end-to-end solar supply chain is increasing and that is great news. 2021 could mark a turning point in how we fund modules and inverters.There’s something you can do to assist solar contractors.
A supply chain runs both ways. Solar energy trends like this one will shape the market for years to come.
5. Solar installs might get more complicated
Homeowners and business owners now have even more features and configuration options, with so many advances in solar technology. That means a bigger headache for electrical contractors if they are not aware of what they’re doing.
Installers need to be comfortable with building electrical wiring, CAT 5/6 wiring, various wireless communication solutions, desktop and cellphone applications, and dozens of inverter/battery configuration options. The credit goes to integrated solar and storage systems.
6. Oversize, overbuild
How much generating capacity building owners and homeowners want installed is going to be one of the most influential solar energy trends. Today, it’s not just about how much energy a home or business consumes right now, but how much they might consume in the future.
It is important to project future energy use since solar is a long-term investment. This is especially as electrification takes over homes and businesses. Electricity consumption will inevitably increase with a rapid increase in building and home electrification that extends to HVAC, heat pumps, and even electrical vehicles and charging stations.
Rather than try and add onto it tomorrow it is best to overbuild for it today and oversize the energy system. .
7. Solar-powered EV chargers
Speaking of electric vehicle chargers, expect to see EV-charging capabilities as one of the most requested features for solar and battery installations.
An electrical vehicle charger can be easily fed by the same 40-amp back feed circuit breaker needed for a standard solar install. In fact, some new inverters actually have a dedicated connection for EV charging. It lowers the cost while simplifying the wiring, permitting, and controls for solar contractors.
8. Commercial and utility-scale solar growth
Investment tax credits (ITC) are responsible for a lot of growth in solar. The ITC window was extended through 2022 in December 2020,. Now, owners of new residential and commercial solar, qualify for a 26% credit based on the cost of their system.
With such a limited window, more and more companies should make the transition to clean energy sooner. This gives companies the chance to make sustainable choices. It also builds consumer trust and a greener future for their business operations.
9. Solar may be #1 three years running
As we mentioned before, solar is one of the fastest-growing forms of renewable energy. It accounts for nearly half of additional energy-generation capacity.
The U.S. solar industry will install more than 324 GW of capacity over the next 10 years. This is even under a business-as-usual scenario. That’s four times the current amount of solar capacity installed today.
There’s nothing business-as-usual about solar energy’s future thanks to decrease in prices.
Since 2010, the cost to install solar has dropped by more than 70%. This has made it one of the most impactful solar energy trends of the decade. This cost reduction has allowed solar to deploy in new markets all over the U.S. The cost of solar installations was at its lowest level in history, as of Q4 2020.
To put that in perspective, the average-sized residential system would cost $40,000 in 2010. Today, the average residential install is about $20,000. Even utility-scale solar ranges from $16/MWh to $35/MWh. This makes it competitive with all other forms of generation.
10. Solar will be an economic engine
By 2019, nearly 250,000 Americans work in solar related jobs. This is across 10,000 companies in every U.S. state. That’s more than double the number in 2012.
Out of those 250,000 Americans working in solar, 150,000 jobs were directly involved in solar installation.
Most installations take place in California, Texas, and Florida. But, solar is actually seeing an increased market share everywhere.
Today, solar is a 50-state market, generating nearly $20 billion of investment in the American economy. If you’re an electrical contractor, solar is where you want to be.