2-08-2015 Residential Solar Trends and Predictions for 2015
2014 saw the largest number of residential solar projects in the United States, and it appears that 2015 is shaping up to surpass that.
Residential Solar Installations in the United States Will Continue to Grow Rapidly
Residential solar installations have experienced explosive growth in recent years. As of 2014, a new solar project was installed every three minutes. GTM Research estimates that by 2016 the American solar industry could be installing a system every minute and twenty seconds, which is great news for solar installers.
The increase of solar systems installed from 2001 to 2014 was a whopping 23,120%, and the solar industry had an annualized growth rate of 70% between 2009 and 2014. Given these figures, it’s not surprising that solar power is the fastest growing industry. The International Energy Agency predicts that, with technological improvements and supportive government policies, solar could become the world’s biggest source of electricity by 2050.
Two Factors Affecting Solar Industry Growth
Solar systems have become more affordable and cost-effective in recent years. Part of this drop in price is due to a decrease in the cost of solar panel materials. Even the price of batteries is dropping, making residential solar more practical, as the excess power produced during the day can be stored and used at night.
Cost effectiveness also increases with increased efficiency of the solar panels themselves. Higher efficiency panels and inverters mean that less roof space is required to generate enough electricity to significantly offset a home owner’s electricity bill, which drives sales.
Overall solar costs are expected to continue dropping as solar companies cut overhead by putting pricing pressure on BOS suppliers (inverters, racking, roof mounts). David Crane, CEO of NRG energy, expects solar to be cost-competitive with grid electricity for residents in 25 states.
Residential Solar Will Remain Strong Despite Changes in Policy Climate
California’s residential rooftop installations (which make up the majority of residential solar installations in the U.S.) will probably experience an upheaval in the first half of 2015 as installers and manufacturers scramble to comply with the new California Rooftop Fire Codes. Furthermore, while a potential non-renewal of the ITC this year may slow residential solar installations after 2016, it will also drive sales up in the short term as customers opt in to take advantage of the tax credit in the next two years.
It’s also likely that 2015’s Republican-dominated congress will try to put a damper on renewable energy and continue promoting fossil fuels, but their efforts will be in vain. The solar industry creates more jobs than the coal industry, and Republicans can’t risk taking a stance against renewable energy sources in upcoming elections.
However the solar sector appears unshaken by potential policy changes. In the first two weeks of 2015 the U.S. residential solar sector had already attracted $795 million in new investments, $250 million of which was invested by Morgan Stanley. This money will be used to expand residential solar by creating jobs and making solar more accessible across the country.