The Future Of Solar Energy For Homeowners
5 - Minute Read
PUBLISHED: Sep 15, 2022
For three years running, the largest share of new power capacity in the United States has been from solar energy. That means that there was more new solar energy capacity than wind energy, hydropower, natural gas, and coal, helping to reduce our dependence on fossil fuels.
Globally, numerous countries are adding significant solar power capacity, including China, Japan, Germany, India, Australia, and Vietnam. Solar modules are now more efficient and cost-effective than even just a decade ago, which is great news for the environment and our pocketbooks.
Although the residential and utility-scale markets have grown steadily over the last decade in the United States, commercial solar energy installations have lagged behind. To further reduce carbon emissions from electricity generation, it is critical for both the public and private sectors to embrace solar energy.
Yet, one thing is certain – the solar power market is dynamic and rapidly evolving. Let’s examine trends and what to expect in the near future.
Current State Of Solar Power Capacity
Solar energy capacity has grown dramatically in recent years. From 2010 to 2020, net solar energy production increased from 1,212 gigawatt-hours (GWh) to 90,891 GWh. One GWh is equal to 1 million kWh, which is the unit that appears on most residential electricity bills.
In 2020, renewable energy generated 21% of the electricity in the United States, which includes wind, solar, hydroelectric, biomass, and geothermal power. In the last several years, nuclear power has remained relatively constant, natural gas has increased, and coal has dropped.
One factor that previously held back solar energy growth was the cost. However, plummeting costs have significantly promoted solar PV deployment. For example, utility-scale solar energy costs dropped to $0.06 per kWh in 2017.
Now, solar power is the cheapest source of electricity in history in certain areas and installations! Thus, generating power from the sun costs less than using natural gas or coal-fired power plants, and it dramatically reduces greenhouse gas emissions, including methane and carbon dioxide.
Likewise, residential and commercial solar energy costs have plummeted. EnergySage notes that the average cost per watt of a residential solar panel system is $2.77, but it varies a bit by state. For example, Arizona, Florida, and Nevada have costs a bit below the national average, while costs in Massachusetts, New York, and New Mexico are a bit higher.
That means a large 10 kW rooftop solar system would cost about $27,700 before the federal solar tax credit for eligible homeowners. A 5 kW system could cost a little more than half of that to install before the tax credit.
However, the future cost of solar panels and solar electricity are unknown. Although solar electricity prices have consistently dropped in recent years, supply chain shortages, rising raw material costs, inflation, and increased shipping expenses could slightly reverse this trend. There’s no time like the present to switch.
The Route To A Solar-Powered Future
Dramatically increasing solar energy production while phasing out fossil fuels will require several approaches. One involves gaining broader governmental and corporate support, while the other requires advances in solar photovoltaic (PV) technology.
Get Governments And Businesses To Back Solar Power
One way to spur solar energy installations is with policies, incentives, and laws that promote deployment. There are a variety of approaches to this on the local, state, and federal levels by governments and utility companies.
Several years ago, the State of California was the first in the country to issue a solar mandate for new homes. Soon, a mandate for new commercial properties will also take effect. If other states follow California’s example, it would help increase the use of solar energy on new construction.
In addition, for eligible taxpayers, there is a federal solar tax credit available for residential, commercial and utility-scale solar projects. It is in effect at 30% through 2032 and decreases to 26% and 22% in 2033 and 2034.
The federal solar tax credit could help boost solar adoption and make solar more affordable, especially for low- and middle-income homeowners.
Another way to promote clean energy is to include more people in the solar energy movement. For example, renters and low to moderate-income homeowners often find it difficult to use solar electricity.
In particular, community solar is a great way to enable renters, low-income households, and homeowners with shaded properties and businesses to go solar for no money down. Community solar allows residents to access energy from a shared solar installation located away from their property. Often, these programs allow residents and companies to pay for solar energy as a subscription, similar to internet service.
Therefore, members don’t have to make a long-term commitment and can cancel with advanced notice, depending on the terms of the contract. When well-executed, this approach is also a very convenient way to lower electric bills. Right now, only 22 states plus Washington DC currently have policies supporting community solar.
Passing legislation in the remaining states would help the community solar market to flourish throughout the country. This would also help make clean energy available to more low and moderate-income households.
Another hurdle to solar system installations is the upfront cost of going solar, especially for low and middle-income households. Although some states have Property Assessed Clean Energy (PACE) financing available, most do not.
PACE financing enables homeowners and businesses to get low-interest loans for energy-efficiency upgrades and renewable energy systems and make payments on their property tax bills. Often, the loan term is between 10 and 20 years. Having more low-interest loan options available for residential and commercial solar installations would also encourage renewable energy growth.
Continue Developing New Solar Technology
Although renewable energy technology has advanced significantly in recent years, there are still ways that future development could encourage solar industry growth and benefit the environment. For example, most solar panels are between 15 and 23 percent efficient, but efficiency gains in solar cells could reduce the roof space and land needed for panels.
In particular, building-integrated photovoltaics, like solar glass and PV shingles, typically have a lower efficiency. However, advances in efficiency would help make this option more popular.
Another way to promote renewable energy growth is by improving energy storage technologies and making them more affordable. Energy storage can help meet peak energy demand with clean energy.
Currently, solar storage batteries are relatively expensive for many homes and businesses, especially without incentives. However, prices for residential, commercial, and utility-scale energy storage have decreased significantly in the last decade. Also, vehicle to grid technologies could increasingly enable electric vehicles to provide electricity for backup power and to meet peak energy demand.
Another issue with solar power is that the panels are difficult to recycle. Designing solar modules to be easily recycled would help conserve resources and lower recycling costs. Recyclability becomes increasingly important as the scale of solar energy increases across the globe and more systems are set to reach the end of their lifespan in the next few decades.
The Bottom Line: Solar Panel Technology Is Crucial For The Future Of Clean Energy
Concern about the climate and electricity rate hikes are encouraging many home and business owners to look to the sun. Dramatic price decreases in recent years and government incentives are making solar energy highly appealing. As technology continues to improve efficiency and costs hopefully continue to decrease, solar should become more accessible to a larger portion of the world population.
If you’re ready to switch to clean energy and potentially save on utility bills, consult a Rocket SolarSM expert to discuss installing solar panels on your home.