Published on September 14th, 2020 |
by Zachary Shahan
September 14th, 2020 by Zachary Shahan
I wrote about the newest US Solar Market Insight Report this morning to provide an update on US solar power capacity added in the first half of 2020, including in relation to other energy sources. However, there’s much more to cover in the report, so let’s go through some of those charts again as well as other ones.
Collapsed, But Rising Again
One big story that you have to notice in the various charts on solar power capacity additions is that installations cratered in 2017 (the year Donald Trump took office). They declined further in 2018, climbed out of their funk a bit in 2019, and are now set for a record year. New solar tariffs, a US–China trade war, and other changes within the US solar industry have chipped away at growth, but it’s also worth noting that 2016 was a phenomenal year, and the overall trends in the industry that have most fundamentally been driving solar growth haven’t gone away.
When you look at cumulative solar installations, you can see the slowdown in growth, but the hill still looks pretty steep.
As a percentage of overall growth in electricity generation capacity, solar power accounted for about 40% in both 2016 and 2019, but suffered quite a bit in 2017 and 2018 (dropping down to a little more than 30% and approximately 25%, respectively). Nonetheless, solar has consistently accounted for 25–40% of new power capacity in the country since 2013. It appears that 2020 won’t quite match 2016 and 2019, but that it will be very close to those peak years.
Looking at residential solar PV installations, you can see the same trends, and 2020 would approximately match 2019 if the second half of the year had the same results as the first half, but the second half of the year should be notably better — it always is, and this year’s first half of the year was marred by COVID-19 as well. As usual, California has carried the day.
Community solar as well as solar power installed on nonprofit, government, and commercial facilities was the one bright spot in the market in 2017, and these sectors have been particularly strong since 2016. Solar leasing/PPA options help get many of these systems online since the 3rd party owners can take advantage of the US investment tax credit and pass on the savings (or at least some of them) to these other entities.
Utility-scale solar power keeps doing its thing year after year, with spikes related to subsidies changes.
Naturally, when the industry is down, jobs are down, but not by too much. There were reportedly almost 250,000 Americans working in solar in autumn of 2019, which SEIA positively notes was “more than double the number in 2012.” That’s a bit lower than the ~260,000 in 2016. That said, if the industry had kept growing as it was before 2017, the numbers surely would have risen above the 2016 figure.
Those 250,000 jobs were spread across at more than 10,000 companies, with companies in every state in the Union.
“In 2019, the solar industry generated $18.7 billion of investment in the American economy,” SEIA adds.
Like nearly every other industry, the solar market took a hit in the beginning of 2020 from the COVID-19 pandemic. Pandemics hurt.
Solar Prices Sliding Down
One of the big drivers of growth through everything has been the dropping cost of solar panels and overall solar power installations. I covered this thoroughly in a couple of recent articles, so, rather than rehash those, I recommend reading the full stories:
Not all residential solar is the same, though. As I’ve mentioned in recent articles, Tesla solar power installations are significantly cheaper than the US average for home solar. Tesla CEO Elon Musk laid out why that is in some answers to CleanTechnica about the matter that I published over the weekend. In general though, the reason is that Tesla took a hatchet to “soft costs” — such as customer acquisition, financing, and overhead costs. In the two charts below, you can see that soft costs now account for more than half the price of an average home solar PV system. In fact, they account for 63% of the system cost. Tesla does still have soft costs, but they appear to be considerably lower than the industry average. (Note that if you want to go solar with Tesla, you are free to use my referral code for $100 off the system cost — https://ts.la/zachary63404 — but I also recommend getting solar quotes from other local installers and comparing the terms as well as the pricing. Not all markets are equal, not all roofs are equal, and comparison shopping can be very useful.)
Overall, though, hardware and software costs have been reduced across the industry, falling from $3.54/watt in 2014 or $3.67/watt in 2015 to $2.84/watt in 2020. That has resulted in a broadly attractive return on investment across the market, especially when you consider how low risk of an investment a rooftop solar PV system is. There’s not much risk of the solar panels going bankrupt and you losing all your money.
That’s the US solar story in a nutshell in 2020 and in the past few years. If there is anything else about the market and market trends that you find particularly noteworthy, please do share with others in the comments below.
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