The State Of The US Solar Industry: 5 Questions Answered

There are also peer-to-peer networks that allow homeowners with solar to donate their excess energy to those in need. Instead of receiving credit from their utility for generating more electricity than they use in a given month, these households authorize the utility to apply that credit to a needy household’s bill.

It is also important to note that utility-scale solar power can lower the cost of electricity for all of that utility’s customers. In Texas, where I live, adding wind and, soon, solar generation has kept wholesale electricity prices low as the price of renewable electricity has fallen. Keeping these prices low makes it harder for power companies to justify raising electricity rates, which directly helps lower-income customers.

What are the biggest challenges that U.S. solar companies face today?

There are signs that the residential solar market is slowing down. Some companies are shifting their focus from deploying as much capacity as possible to trying to maximize revenue by scaling back expansion, so that they can focus on a few states that offer the best returns on investment.

In some major markets, such as California, bringing large amounts of solar generation online is depressing wholesale electricity market prices, which erodes the value of the electricity that these systems produce. This makes projects gradually less economic to install.

The Trump administration’s solar tariff will be more challenging for utility-scale solar projects than for residential, because the modules account for a larger share of the total cost of large projects. A 30-percent tariff will likely increase the costs of solar installations by about 11 cents per watt, or roughly 10 percent, which could reduce the amount of solar installed over the next 4 years by five to eight gigawatts of capacity, mostly at the utility scale.

In my view, the biggest challenge for U.S. solar companies – particularly installers – is uncertainty. Congress recently tried unsuccessfully to cancel tax credits for installing new solar capacity, and the tax cut bill that was enacted in December includes some changes that may affect credits for investing in solar. Companies need certainty to create value and jobs – and for solar and other renewable energy sources, certainty is in short supply at the moment.

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Rose B. Cates 1 year ago Member's comment

Great post. Really it is new information for me