Energy Transition: Bright Days Ahead for Solar
By 2050, solar is projected to be the cheapest source of new electricity on a global scale. The industry is experiencing meteoric growth, spurred by unprecedented demand, Inflation Reduction Act funding, demand side management programs, and battery storage innovation.
In the not-so-distant future, renewable energy will eclipse fossil fuel as the main power source in the world energy mix, offering a pathway to both decarbonization and energy security.
According to DNV, a global risk management firm, “By mid-century, total installed capacity will be 9.5 TW for solar PV and 5 TW for solar and storage. The resulting 14.5 TW of solar capacity is 24 times greater than in 2020."
As solar installations continue to proliferate, costs are projected to fall from a global average unit investment cost of $900 per kW today to $650 kW by 2050.
Solar is now the least expensive form of retail energy in the world, harvesting more power using less space and fewer resources than ever before. In many markets, it is now less expensive to build new utility-scale solar power generation facilities than it is to operate existing fossil fuel facilities due to the decrease in the cost of solar system components, improvements in efficiency, and lower marginal operating costs.
And while prices for solar panels have dropped precipitously, panel efficiency continues to increase dramatically: studies by Environment America show that solar panels are approximately 40 percent more efficient than those produced a decade ago.
As utility rates rise in markets throughout the nation, the numbers are penciling out for rooftop solar. Green Builder magazine Editor-in-Chief Matt Power reports that “for every 5 cents per kilowatt hour (kWh) a utility increases its cost to end users, solar panels gain 4.2 percent on their annual return on investment (ROI). Electricity hikes mean that residential solar arrays pay for themselves in a shorter time period in every region of the United States.”
Furthermore, tax rebates, incentives, and creative financing vehicles continue to play an essential role in solar’s spectacular upsurge. Power Purchase Agreements (PPAs) have enabled homeowners to access solar systems without a massive upfront investment. And, the Inflation Reduction Act is adding even more incentive for homeowners to install solar by extending the federal tax credit, so homeowners who install solar systems between the start of 2022 through the end of 2032 will be able to deduct 30% of the cost from their federal income taxes.
Solar is also proving to be essential for resiliency and price stability in states that are experiencing grid volatility during extreme weather events. As the primary example, in Texas, which recently set a new peak record for electrical demand at a whopping 80,828 megawatts due to extreme heat, residents have been nervously watching as the state’s fragile grid infrastructure is pushed once again to the brink. According to the Texas Tribune, “The significant increase in solar power generation in recent years has helped meet the growing demand for electricity in Texas. Some 16,800 megawatts of solar power could be produced on the state grid as of the end of May, compared with 2,600 in 2019, according to data from the grid operator, the Electric Reliability Council of Texas.”
The battery storage market has lagged behind the photovoltaics sector but is now progressing at breakneck speed. Battery systems are becoming more streamlined and elegant than ever before, integrating storage technology and inverters, simultaneously coupling AC and DC to optimize efficiency and reduce energy loss, and including load management so that homeowners can decide which systems to prioritize during peak usage or blackouts.
Demand for battery storage is being driven partly by demand side energy management programs and time of use pricing structures, which allow homeowners to draw energy from batteries during times of peak demand when prices are highest, saving them money while reducing grid stress, and also partly by an increased interest in enhanced resiliency, which offer homeowners the security of backup power if the grid goes down.
JinkoSolar’s EAGLE RS DC-coupled solar plus storage system helps homeowners optimize time of use rates and utilize solar energy when the sun’s not shining. The next-generation system utilizes an updated hybrid inverter with an integrated autotransformer and ATS, which reduces the number of components to install, takes up less space in the home and makes installation even faster. The system also comes equipped with Virtual Power Plant (VPP) compatibility for seamless integration with demand response programs offering homeowners additional ways to save. Image courtesy JinkoSolar
Panasonic Solar’s new EVERVOLT home solar energy system integrates high-efficiency solar panels with advanced inverter and battery storage technology. The system is expandable to meet homeowners’ growing energy needs and couples AC- and DC. EVERVOLT includes a sophisticated app so that homeowners can monitor battery status, control specific loads, and manage grid switching, load shedding, and energy consumption. Image courtesy Panasonic
At the recent Florida Solar and Storage Summit hosted by Florida Solar Energy Industries Association (FLASEIA), experts converged to explore the future of the sector.
“We’re excited to see storage continuing to gain traction,” said Jeff Juger, Deputy GM at JinkoSolar (U.S.) Inc. “We’re seeing major advances in high-capacity lithium-ion batteries as well as consensus around storage solutions and form factors. Manufacturers are focusing more and more on ease of installation and commissioning to streamline the installer experience, which is essential for deployment.”
Juger and his colleagues are also tracking:
- Innovation in the vehicle-to-grid sector with multiple sources of power, especially when extreme weather events occur.
- Distributed power to enhance resiliency as well as structural integrity (solar systems can actually strengthen roofs to make them more durable for homeowners).
- Inflation Reduction Act funding as a driver for projects, which was covered in detail during this conference session.
Warning: Obstacles Ahead
While the solar sector is experiencing unprecedented growth, there are roadblocks ahead. To begin with, there are some utilities that are still resisting rooftop solar—some that are even pouring money into state constitutional amendments that would impose new barriers to the expansion of rooftop solar energy generation.
Another challenge facing the solar industry has to do with the disposal of modules once they’ve reached the end of their life. According to PV Magazine, “By 2030, retired solar panels are estimated to cover an area equivalent to about 3,000 football fields as panels that end their life enter landfills. In the United States, there are no federal regulations to mandate PV recycling, and according to the National Renewable Energy Laboratory (NREL), less than 10% of the country’s decommissioned panels are recycled.”
However, some entrepreneurial companies are stepping up to the challenge, eyeing the projected growth of the solar module recycling market, which is expected to reach $80 billion by 2050.
For example, Mycrogrid Materials Recycling (MMR) is building a facility in Coachella Valley, California, that will recycle solar panels from California and Arizona. Poised to become the largest solar recycler in the Southwestern U.S., MMR will recycle photovoltaic modules, racking and railing, and battery storage equipment. The facility will break down solar system components, such as glass, silver, and silicon for reuse in new solar components and other products.
No doubt, these are exciting times, especially considering that only 35% of the technology that is needed to reach our climate goals has yet to be invented. Translation: we have a colossal opportunity—and challenge—ahead of us. Watch for continued warp-speed innovation in the solar sector and throughout the economy.