The solar energy industry continues to grow each year. As a result, governments continue to invest in green technologies. There are numerous opportunities for investors, scientists, installers, and manufacturers within the sector. However, China, tariffs, and efficiency are the three main factors holding the industry back.
The outlook for the solar energy industry has never been better. The U.S. Department of Energy projected that solar generation would increase from 211,000 MWh per day in 2017 to 260,000 MWh per day in 2018, which is a 23% increase. The generation is expected to jump to 290,000 MWh per day in 2019, which would be another 12% increase from 2018. In quarter one of 2019, the US-installed 2.7 gigawatts of solar PV capacity, which is a 10% increase from quarter one of 2018.
By 2023 there will be 14 GW of PV installed each year. The total of installations will be 230 GW of PV in the United States. There are also growing markets across the globe, including Latin America, Europe, and the Middle East. The demand for solar panels will continue to rise as more nations embrace clean energy.
Pain Points and Opportunities
One interesting piece of information is that China manufactures around 60% of the world’s solar cells each year. The office of the U.S. Trade Representative claims that China will produce 71% of the world’s solar cells by the end of 2019. Meanwhile, the Trump Administration has introduced 30% tariffs to try and prevent China’s dominance.
There are some estimates that claim the tariffs will reduce demand for solar panels as prices will increase. The Solar Energy Industries Association (SEIA) estimates that nearly $8 billion in new solar investments as well 9,000 jobs were lost due to the tariffs.
Two U.S. manufacturers of solar panels actually went out of business this past year. Suniva and SolarWorld both lobbied heavily for the tariffs, but not even the tariffs could help with their eventual demise. Other U.S. based companies involved in the solar energy industry are still lobbying to remove the tariffs.
There are countless startups and large corporations that are investing billions of dollars into new solar energy technology each year. Private equity funds with sovereign wealth investors poured $5.81 billion into renewable energy in 2018. Solar energy technology will need to improve significantly in order to play a part in the green revolution.
Nearly 1,000 companies from across the U.S. solar industry supply chain today sent a letter to Congress calling for the extension of Section 48 and Section 25D solar investment tax credits (ITC).
The Solar Energy Industries Association (SEIA) is leading a national coalition to extend the ITC, one of the most successful clean energy tax policies ever created. The ITC was passed by a Republican-controlled Congress in the 2005 Energy Policy Act and enacted by George W. Bush. It was extended in 2015 with bipartisan support.
Efficiency is a critical issue the solar energy industry has always faced. There have been several innovations that have yielded high-efficiency solar cells. Although, the issue is these solar cells have limited use cases. Most residential solar panels still hover around 20% efficiency rates, which is okay, but not good enough to become a dominant source of energy.
Perovskite and perovskite-silicon panels are the next in line for innovation in the solar energy industry. MIT researchers and startups around the world are actively working to snatch up these new types of solar cells and panels. Swift Solar is a fledgling startup that recently raised $4 million to explore these new solar cells. Further, the startup is claiming that their new solar cells have an efficiency of close to 40%. Oxford PV has already set a world-leading efficiency mark for perovskite-based cells at 27.3%. Whether or not these newly developed solar cells can be manufactured in an inexpensive manner remains to be seen.
Incentivizing homeowners to purchase and install solar panels is a difficult task. Not only do customers have to fork up a significant amount of cash, but they are also forced to deal with unattractive panels. There are a few startups that are working on making solar panels customizable. For example, Sistine Solar is working on developing a solar skin where the panel will match and blend into any roof.
Researchers, governments, and the private sector all have to collaborate in order to make the solar energy industry viable in the long-term. There are roadblocks and pitfalls that could quickly derail any past wins. Nevertheless, the solar industry will continue to expand as innovative technology and policy bring us closer to an energy self-sufficient country.
SHR Energy Management has delivered comprehensive solar energy solutions for over a decade. SHR was one of the earliest developers of solar installations in the Northeast U.S. under the leadership of Founder and Chief Executive Noel Lafayette. With a comprehensive understanding of every stage of solar development, Noel demonstrates a deep knowledge of solar industry complexities, including regulatory matters, financial incentives, and renewable energy credit markets. SHR is capable of handling commercial, municipal, and utility projects ranging in size from 200kw to 25MW with access to over $500 million in capital funds. SHR is experienced in developing a wide variety of energy cost-saving projects, along with access to financing sources, knowledge of state/local regulations and incentives. This combination of the elements allows SHR Energy Management to move quickly with unmatched flexibility and transparency in our approach. For more information, contact us today.