The U.S. has enough installed solar energy capacity to power 4.6 million homes. Solar energy accounted for 32 percent of total new power generation in 2014, exceeding coal and wind energy but lagging behind natural gas. In just nine years, the installed cost of solar energy has fallen by more than 73 percent – setting up the industry for explosive growth.
TriplePundit spoke with Vikram Aggarwal, founder and CEO of EnergySage, the so-called “Expedia of solar,” about solar energy trends and what to expect for 2016 in the residential market.
1. Unprecedented boom continues
Last year, analysts predicted that solar would grow by 57.4 gigawatts in 2015. The recent five-year extension of the investment tax credit (ITC) in the U.S. for both residential and commercial installations further enhances the growth trend. Now that solar manufacturing capacity has expanded significantly, the price of solar equipment has plummeted – making solar energy cheaper than grid-supplied power in many markets.
“The residential solar market is a vibrant $7 billion industry, and on track to generate more revenue by year-end 2016 than Major League Baseball,” Aggarwal said. “The economics of solar are rapidly changing for solar shoppers, installers and financiers alike.”
2. Misinformation in the solar market continues
The solar industry continues to change and evolve so quickly that it is difficult for the average consumer to stay on top of all the needed information. In some cases, sales tactics have hurt consumers. “I think some of the larger solar companies have relied on very aggressive marketing, going door-to-door, calling, and have not had very transparent practices,” Aggarwal told 3p. “It has created lots of skepticism.”
Lack of understanding prevails, making transparency by the solar installers and unbiased third-party sources of information especially important for solar shoppers to make informed choices. Solar system owners can typically save a lot on utility bills, but lack of information plagues the industry.
“Solar has migrated from being a niche, environmentally-driven product to one where financial savings are driving the interest in solar,” Aggarwal explained. “Many consumers have misconceptions that solar is very expensive and may not pay off. We are working to help consumers realize that solar can actually be very financially rewarding.”
3. Dizzying array of solar options
Solar shoppers now have more equipment, ownership and financing options available to them than ever before, but this can be overwhelming. Forty financing companies, 43 solar panel brands and 24 inverter brands bid out on the EnergySage Solar Marketplace. It is especially misleading when solar installers push one package and are not transparent about all the options, as solar shoppers often get a lot of information from solar salespeople.
EnergySage, which has been described as the “Expedia of solar,” allows consumers to comparison-shop for solar, with simple, clear information. Because it is not affiliated with a manufacturer, financing company or installer, shoppers have access to objective third-party information and can get quotes from pre-screened solar companies for a true apples-to-apples comparison. Such services are necessary for solar consumers to find the best solar solution for their situation, possibly saving thousands in the process.
4. Solar financing options expand
The EnergySage Solar Marketplace Intel Report states, “In [the first half of 2015], consumers paid on average $3.79 per watt in gross cost and achieved payback in just 7.5 years.” Given that the design life of most solar equipment is 25 to 30 years, solar is now a sound investment in many areas, rivaling the returns of many traditional investments. Solar system owners can often save money from day one with a solar system.
Now that solar has proven itself as a safe, low-risk, high-return investment in many regions, it is much easier to obtain financing for solar technology. Low-interest loans with as little as no money down are available to solar shoppers, reducing the hurdles to solar ownership. It is also making solar ownership more appealing and advantageous than solar leases to many homeowners.
5. Solar is generating the majority of home electricity consumption
For homes with solar, the systems met an average 85 percent of total demand in 2015, and the average 7.9-kilowatt system saves roughly $2,000 on electricity costs each year, according to the EnergySage Solar Marketplace Intel Report. This is made possible by solar equipment efficiency gains, as more energy can be created from a smaller surface area. There are now solar panels on the market that are more than 22 percent efficient. In the laboratory, solar cells have been developed that are 40 percent efficient, but this technology isn’t available on the market yet.
Image credit: 1) Pixabay 2) Sarah Lozanova