Nearly a decade ago, I worked for a solar energy installer. People would call us up with a feverish interest in solar energy. They didn’t want to pay a high monthly electric bill, and they wanted to decrease their use of fossil fuels. When they understood the upfront cost and their monthly savings, most of them quickly lost interest despite their passion for energy independence.
A lot has changed in the world of solar electricity in the last decade, making it a brighter time than even to harvest the sun, and the market is responding accordingly.
- There is now 20 GW of installed electricity generating capacity in the United State – enough to power 4 million homes.
- Solar power accounted for 32% of all new installed generation capacity in the United States last year, second to natural gas.
What has made its popularity possible? Let’s take a look.
The falling cost of solar electricity
The cost of solar energy has plunged in recent years. According to the National Renewable Energy Labs, the installed cost of solar energy systems has fallen each year by an average of 6 to 8 percent. This is largely due to the drop in solar panel costs, which plummeted 60% in 18 months, starting in early 2011. Aside from the panels, solar components have also come down in cost, but more modestly by comparison. In addition, the average cost of retail electricity in the U.S. grew by $.03 per kilowatt-hour from 2004 to 2014, making it more lucrative to produce your own.
Lower upfront cost
A decade ago, few loan products were available for solar and potential customers had fewer options.
“Customers really appreciate the ability to eliminate the upfront cost and that was one of the significant developments in recent years [in the solar industry],” says Jonathan Bass, Vice President of Communications for SolarCity. “If you had to take equity out of your home or pay $20,000 upfront, it limited solar to the homeowners that were willing and able to do that.”
Now there are more options available, with better terms. In many cases, this results in cost savings from day one, a concept that was unheard of a decade ago. Solar leases for example often allow people to save on their electricity bill each month, with as little as no money down. There are also loan products available with terms up to 30 years, thus the longer terms enable monthly payments to be lower than shorter term loans.
Greater solar design freedom
Technology innovations are giving solar installers greater freedom. For example, power optimizers and microinverters are decreasing the impact of shade on a solar system by allowing each panel to operate independently. While some roofs weren’t fit for solar a decade ago, these technologies are boosting solar power generation.
Inverters with multiple channels are also making it more efficient to install systems on different roof lines. For example, if there are roofs with different pitches, such inverts can be used to boost power production.
For more on solar’s energy generation’s evolution check out this solar timeline.
Feature image courtesy of University of Salford Press Office