Written by Davey Newlove
I think it’s safe to say that 2020 has been quite an unusual year for everyone! We’ve all endured state lockdowns due to the coronavirus, and many industries have had major challenges to overcome. The solar industry has been no exception. However, it has shown signs of life and growth that many other industries haven’t seen this year. Let’s take a look to see what may be in store for the future of solar energy in Georgia and beyond.
THE EXTENSION OF THE SOLAR TAX CREDIT
Over the last few years, the Federal Investment tax credit (ITC) has been a driving force for sales in the solar energy industry. It looked like the 26% tax credit would be expiring in 2021, but in late December, the federal government extended it by two years through 2022! After that, the solar tax credit is slated to walk down to 22% in 2023. It will go away completely for residential installations in 2024 while remaining at 10% for commercial projects. The ITC also applies to battery storage, so right now is the best time to take advantage of this excellent opportunity to earn extra savings!
THE RISE OF SOLAR-PLUS-STORAGE
Over the past decade, natural gas and renewable energy have increasingly comprised the U.S. electricity mix. 2020 has seen a growing number of solar-plus-storage installations, and with the dropping cost of battery storage options, that trend will likely increase even more in 2021. According to the Solar Energy Industries Association (SEIA),
“Federal, state, and local policymakers are making decisions now that will dictate to what extent storage can and will be used as the grid diversifies and electricity demand increases.”
As we’ve seen in California, the policy of installing solar panels on all new residential properties is a great idea. Still, it falls short of the intended effect if battery storage is not installed with it. As more and more states look to adopt similar policies as California’s, look for a rise in installations of solar panel systems with battery backup installations.
Solar-plus-storage options are becoming more appealing and affordable to customers who want energy independence. With battery backup, customers do not have to worry about blackouts from the grid, often due to storms or other natural disasters, such as fire season in the West. In the long run, the more solar installations there are, the more storage will be adopted into those deployments. The future for solar-plus-storage looks very bright and should drive much new energy generation in the 2020s and beyond.
SOLAR TARIFFS
Solar tariffs have been a hot topic in 2020, and that trend may be coming to an end in 2021, but that remains to be seen. The tariffs have led to higher panel costs in Georgia and across the U.S. and have also led to a lower number of domestic jobs. According to SEIA, U.S. solar panel prices are among the highest globally, 62,000 jobs have either been lost or not created, and tariffs have slowed U.S. progress on climate and environmental issues.
These solar tariffs could be coming to an end in 2021, but the future of the tariffs still remain unclear. President-elect Biden has made his disapproval of the tariffs clear, but hasn’t committed to ending them as opposed to merely reevaluating them. It looks like consumers and solar companies may be stuck with the tariffs for the time being as they are set to run through 2022.
FALLING COSTS OF SOLAR
Despite the tariffs, the cost of installing solar panels has continued to drop, making solar energy more affordable for more consumers. According to Greentech Media,
“U.S. solar PV system costs fell across all market segments from 2019 to 2020 as module prices continued to drive down system costs.”
This has been a trend in the solar industry over the past decade, and there doesn’t appear to end in 2021. According to a report from Wood Mackenzie, the price of solar electricity will drop by an estimated 13% in 2021 and could even drop by 19% by 2025. The falling cost of solar energy will fuel further residential and commercial solar energy deployment.
Good news has been in short supply in 2020, but thankfully brighter days appear to be in the not so distant future. As the sun continues to shine, the future of the solar energy industry continues to look bright into 2021 and beyond.
If you feel that going solar is right for you, contact us today to set up a quote!