As solar energy continues to gain steam in the American market, there’s no better time than now to explore the current market and examine some of the trends and predictions for the future – particularly here in Arizona.
Check Out These 5 Solar Predictions
The solar industry has taken decades to develop and mature to the point we’re currently at, but the growth curve is beginning to steepen. Experts believe the we’ll experience more innovation and greater adoption in the next five years than we saw in the previous 50 years combined. Subsequently, they’re making these five predictions:
1. Arizona Continues to Lead the Nation
According to a recent study from Solar Energy Industries Association (SEIA), Arizona had the third-most residential solar capacity in the United States with 41.9 megawatts in the first quarter of 2019. In total, the state had 52.83 megawatts of installation over that same period.
“That is one of our richest natural resources. We have a lot of sun here in Arizona, and when you combine that with some programs that move solar forward and the declining costs associated with installing solar, you get additional solar on your system,” APS director of resource planning Jeff Burke says. “As an industry, we’re trying to make sure that we’re making progress towards a cleaner energy mix. This is one of the things we do in addition to nuclear and demand-side management to achieve that goal.”
2. Solar Becomes More Affordable
“In 2018, the average installation cost for homeowners was between $2.87 and $3.85 per watt,” GoingSolar.com explains. “The gross cost of a solar project averages to around $16,000, before tax credits are applied. So, if you assume your household would need 5 kilowatts (kW) of power, your solar panels would cost you anywhere from $10,045 to $13,475 after tax credits have been applied.”
While every homeowner will see a significant ROI on a $10,000 to $14,000 solar investment, the initial buy-in price point scares off many. The good news is that the cost of solar will likely diminish in the coming years, which will reduce hesitancies and amplify adoption.
3. Financing Becomes More Important
Many Arizona homeowners rely on home equity loans to finance residential solar power systems on their properties. And while this is fine in a healthy economy, it becomes problematic in a recession. In fact, during the last recession, the residential solar industry came to a screeching halt as real estate values declined and home equity loans become fewer and farther between.
As much as Arizona and other states are booming, many believe that another recession is coming within the next five years. While this could create problems, there’s also an increased emphasis on solar-specific financing packages – both for residential and commercial systems. Look for more lenders to get involved with this portion of the market in the future – making solar more accessible to the masses.
4. Residential Solar Looks Much Different
Solar power systems are conspicuous and recognizable in today’s marketplace. If a home has solar panels installed, it’s easy to identify them. But in 15 or 20 years, this may no longer be the case.
One of the limiting factors in today’s market is that many homeowners don’t like the aesthetic appearance of solar panels. In response to this, there’s significant innovation occurring on the design side of solar power.
At Michigan State University, researchers have developed transparent solar panels that they believe could be applied to almost anything – including cars, windows, and even mobile device screens. Other researchers are working on ways to create solar panels that look like traditional roof shingles. Either of these innovations has the potential to increase adoption to a significant degree.
5. Battery Storage Systems Take Off
“Solar plus storage is the next big thing for residential solar in Georgia,” industry insider Don Moreland believes. “Solarize programs running during 2018 saw over 50 percent of participants purchasing battery storage with solar. We expect to see this trend continue into 2019, as more manufacturers enter the marketplace, supply chains recover from high demand, and the price continues to fall.”
This trend will create a demand for more battery storage systems and innovation in the state of Arizona and beyond. The traditional model of power generation and storage will disappear and be replaced by a system in which individuals have much greater control over their own power.
6. Upgrades and Maintenance Become Next Biz Opportunity
Up until this point, most of the solar industry has been about education and installation. But in the coming years, this maturing market will face a significant need for maintenance, upgrades, and repairs. From cleaning panels and updating old monitoring systems to replacing broken panels and swapping out inverters – there will be plenty of room for contractors to carve out lucrative niches in these areas.
The Future of Solar is Bright
It’s challenging for most people to understand just how important and catalytic solar is to the future of our state (and our country). From major infrastructure to residential real estate, solar has the potential to change everything for everyone. Adoption is the first major hurdle – but it’s something that Arizona homeowners are embracing by the droves. After that, it’s all about building up economies of scale, maintaining cost-effective price points, and innovating to the point that solar becomes a powerful force that works in the backgrounds of our lives and continuously yields value.