As 2016 comes to a close it’s already proved a record year for solar and other renewable energy sources. With a new administration coming into power in the US and a Republican Congress, the industry could face new challenges in the US, but over the past few years solar power has continued to beat expectations with lower prices and more installations than anticipated in the US and the world. It’s also becoming increasingly apparent solar power has a key role to play in fighting climate change even as global energy demand increases and many in the industry and outside of it anticipate positive things for the industry in 2017 and beyond.
President-Elect Donald Trump (R) has made many appointments who have been hostile to renewables and solar power, and he has reiterated his support for fossil fuels. But he may still support growth in the solar industry.
“President Trump will embrace solar because it is cheaper and continues to be a jobs engine. He will follow in Obama’s footsteps as he welcomes a solar system on the top of his new house for the next four to eight years,” wrote Barry Cinnamon, CEO of Spice Solar, in his annual 10 predictions for the solar industry at Greentech Media.
This opinion is backed up by Sven Lindström, CEO of Midsummer, writing at Altenergymag. “Donald Trump will turn green and it will happen already in 2017. Renewable energy is the most efficient way to make the US independent and self-sufficient,” Lindström said. “US citizens like independence and so does President-elect Trump.…If policies are made to curb feed-in tariffs and net-metering, Tesla will just sell more batteries and more households will go off-grid. The PV revolution has just started and it will take more than a policy shift to stop it.”
Solar power already is the biggest source of new energy in the US in 2016 and that could continue, and not just in the US. For instance, in its Top Seven Technology Trends for 2017 IHS Markit noted that in 2017, solar power will continue to be the planet’s largest source of new renewable power. “More than a quarter of all PV capacity added worldwide in 2016 and 2017 will be in the form of solar panels,” IHS said. “The growth of solar can be attributed to sharp drops in the cost of PV systems, combined with favorable country policies toward new renewable power.”
One of the reasons solar is likely to keep up its historic level of demand is that the cost of solar power keeps coming down. Cinnamon said that costs will continue to be low. “As the year progresses, these low prices will apply to higher and higher efficiency modules. Differentiated modules—those with integrated electronics, simplified installation technology or 20+ percent efficiency—will command higher price points and margins simply because they provide more value to installers and homeowners,” Cinnamon said.
Pricing pressure to keep solar panels selling at or even under cost means solar manufacturing in the US will continue to decline. “Sadly, the module supply chain is almost entirely from Asia: wafers, cells, backsheets, EVA, junction boxes, glass and aluminum frames are all cheaper in China with comparable quality,” Cinnamon explained. “Political rhetoric will not bring manufacturing back without a good plan to address the supply of key components in the U.S. Ironically, tariffs have made things much worse for US manufacturers—removing tariffs on cells and extruded aluminum for solar would go a long way toward improving the economics for the remaining U.S. module manufacturers.”
While much has been made of community solar power, Cinnamon observed that it will struggle to grow. “But when community solar is developed by utilities, they charge a premium for solar, so customers don’t buy. When lower per kilowatt-hour cost community solar projects are developed independently, utilities act to delay projects or increase costs in order to protect their monopoly,” he said. To encourage more growth in the market he suggested community-choice aggregation programs by local governments. “These CCA programs break the utility electricity sales monopoly, providing clean and cheap power to customers.”Tweet