At a cost of between $3 per watt and $3.50 per watt, residential solar offers a cost-savings in anywhere from a quarter to half of US states—even without state subsidies. That’s thanks to more financing options and high consumer demand, according to the Department of Energy (DOE).
“Solar power is now more affordable in the United States than at any other point in history,” exclaimed Caroline McGregor, the acting soft costs program manager at the SunShot Initiative. “With continued decreases in the cost of solar and emerging business models that make financing more available, solar is becoming more affordable for everyone in every state.”
Using a simple “savings to investment” (SIR) ratio based on data analysis, the National Renewable Energy Laboratory (NREL) determined the ability to recover an investment in solar based on utility bill savings in all 50 states. It’s results determined that at the aforementioned rates rooftop solar can result in savings in up to half of the states in the US.
The SIR analysis used costs reported in both the NREL Benchmark Report and the GTM Research/Solar Energy Industries Association (SEIA) Solar Market Insight report. It assumed systems will operate from 25 to 35 years and will have operation and maintenance costs of $29 per kilowatt per year. The analysis also assumed full net-metering and that households would receive benefits of the federal 30 percent Investment Tax Credit of through established financing or business models, such as third-party ownership or community solar models.
But there’s still a disconnect in who solar could benefit most, low to middle-income households. McGregor points to a recent report by the George Washington University Solar Institute, which showed that the 49.1 million households earning less than $40,000 of income per year and making up 40 percent of all U.S. households account for less than 5 percent of home solar installations. The DOE wants to see all communities benefit from clean energy to help the country meet its climate goals. One of the chief paths it sees for that is in community solar power.
Community solar can already reach lows of $2 to $2.50 per watt. “Holding everything else constant, the number of states in the analysis with positive SIRs increases to 35-48 states with these lower installed costs, which means solar energy is potentially affordable in the vast majority of the country through the community solar business model,” McGregor said. “The enormous opportunity to expand solar electricity access to low- and moderate-income households is why the SunShot Initiative launched the Solar in Your Community Challenge,” she added.
Indeed, the challenge should help community solar catch up even quicker. The DOE reported that 13 states installed more than 100 megawatts and the Solar Energy Industries Association that more than 2 gigawatts of residential solar were installed across the US in 2015. Community solar, which got a much later start—some of the first community solar projects in the US were launched in 2010—is also growing exponentially. “Between 2010 and 2015, community solar installations grew rapidly, reaching almost 100 MW—and this business model has even greater potential. The National Renewable Energy Laboratory (NREL) estimates community solar could comprise up to half of the distributed PV market in 2020,” McGregor said. The new challenge can help it reach those levels and extend the opportunity of solar to more low and middle-income people across the US.Tweet