Solar predictions for 2014 and the future
In 2014 we are going to finally see a strong push by government agencies and the military to add solar to their mix of purchases. Although Obama passed on solar when the Solyndra fiasco transpired, the military and other government agencies have learned the value of solar PV as a cost saver and a national security solution. The government will be a lead buyer of solar in the near future and for years to come.
Additional project cost reductions year after year
Additional cost reductions will come through manufacturing of higher efficiency PV panels. Although pricing for panels will stay within 70 to 80 cents a watt for 2014, the efficiency will increase. Imbedded technology in PV panels for energy distribution will begin the financing approval process and by 2015 the first energy efficient panels will be added to a solar PV project. Balance of systems will reduce costs through refined construction practices, mounting systems, permitting and financing standardization, inverter and system control procedures. The combined reductions will assist in bringing installed cost down by 10 to 20 cents in 2014, 2015 and 2016.
New investment capital ensures solar PVs growth
The residential market will continue to grow as a percentage year over year only seeing a downturn when the entire housing market takes a turn for the worse 10 to 12 years from now. New investors, banks, and financing institutions will enter the residential and distributed generation spaces with financial products focused on technology companies, EPC’s and developers instead of only installers through companies like Clean Power Finance, SunRun and SolarCity. A number of financial institutions that have waited on the sidelines during the last few years will invest in solar. More insurance providers and corporations will add tax equity and debt for financing solar projects. Additionally, consolidation will see EPC’s and Developers being the target of manufacturers and Fortune 1,000’s that see the growth trend in solar PV.
Growth with or without ITC
Based on the past 3 years there has been a 5X growth in solar. This makes solar the number 2 new source of energy production growth, based on capacity increases. Another important fact of solar growth has been incentives until recently this has driven the market. If we look at 2013 Q3 the largest solar PV market was California with 51% of the market share without having CSI funding showing that incentives with ITC are not necessary when electricity prices are high. There is a solution for the loss of ITC as well.
In 2017 without ITC for new projects there will be a drop in solar growth unless there is some wise policy making. If the Congress and Senate wants to get rid of ITC instead of a gradual reduction of the ITC program there will be a decline in total installed growth. Although at this point the military, government and nonprofit opportunities will increase dramatically preventing a loss in developed megawatts during that period. Potentially, Congress and the Senate will decide to extend the ITC program or gradually reduce ITC over a 3 to 5 years period which would keep solar development profitable with continued increased growth.
In conclusion, solar is here to stay. If you would like to read previous predictions over the last 2 years please go to the following links: