After what’s already a record-shattering year for the US solar industry, challenges lie ahead in 2017 and beyond. GTM Research recently outlined some of the challenges it and the Solar Energy Industries Association (SEIA) are anticipating the industry will face.
While residential solar installation is expected to slow down over the course of 2017, community and off-site commercial solar is projected to continue growing. The commercial segment of the industry is projected to add 800 megawatts to the grid by the end of this year. Additionally, community solar projects are expected to grow fourfold by developing more than 200 megawatts. This marks the first time more than half of the annual commercial and municipal customers’ solar capacity will come from off-site community and wholesale solar projects.
“Large corporate customers have ramped up procurement of offsite wholesale solar projects, which are currently accounted for in the utility PV segment. This demand has largely come from Fortune 500 customers with large industrial loads or aggressive, near-term renewable energy procurement targets,” says GTM’s Cory Honeyman.
Long-term demand from corporate customers for solar and energy storage systems will play an important role in determining whether on- or off-site solar projects will dominate commercial solar projects in 2017.
With PPA pricing for utility-scale solar projects ranging between $35 and $60 per megawatt-hour, the inability of utilities to rollback development on projects that are not ready to go online may hold up market expansion. For instance, California, the largest solar market in the US, has already obtained enough solar to meet renewable portfolio standard commitments till 2020.
GTM says residential solar growth in major markets like California, New York and Massachusetts is expected to slow down. This is due to publicly traded residential solar companies struggling to show a profit. One approach solar installers may take is to reduce the number of new installations to show a return on investment of existing installations.
Another clear problem is “whether residential solar installers demand for cash sales and loans over leases and PPAs has picked up more quickly than expected, and portions of the installer landscape are still playing catchup in serving this change in demand,” adds Honeyman.
Rooftop solar installers in major markets, like California, express that they are having problems converting leads into sales because of “customer fatigue” where homeowners are exposed to an influx of door-to-door sales pitches and other marketing practices.Tweet