As we beckon in a new year, we are reminded of the past. After a tumultuous year, people worldwide are ready to emerge out of the pandemic, eager to get back to normalcy. We have experienced an increase in home utility bills during the pandemic, the decrease of door-to-door sales, and the rise of online sales for solar. Like every significant sector, solar took a hit from the pandemic. Yet, the new year brings in new hope and anticipation. Solar is looking up for 2021.
Solar Bounces Back
It’s no surprise that solar found a way to adapt and survive in a market disrupted by Covid. Installations are becoming more affordable for consumers, while technology continues to improve. More people are signing up for solar than ever before because of the ability to be self-sufficient through solar power. Whether it’s to save money or rely on renewable energy for the environment, people are making the switch. The SEIA, Solar Industry Energies Association is a trade group that reported, “New home solar installations, measured by their power capacity, are expected to grow 7 percent this year despite the coronavirus pandemic.” Both the SEIA and their partner Wood Mackenzie, a research and consulting firm, expects substantial growth over the next five years.
Expect an Increase in Solar Installations
Solar did much better than expected during 2020. It looks to continue this trend by growing in 2021. According to the Labor Bureau of Statistics, the position, solar photovoltaic installer (PV installer) is projected to grow by “51%” in the next decade. This is a much faster rate than many other occupations. With the need for solar increasing, the need to hire more PV installers grows along with it. Rooftop installations are also expected to increase because of the growing demand for electric vehicles. Consumers will have to consider adding home charging ports and batteries in their garages.
Potential Changes In Public Policy
At the tail end of 2020, we saw a last-minute attempt to extend the solar ITC, Investment Tax Credit. In a somewhat miraculous effort, lawmakers prolonged the federal tax credit. The solar ITC is a dollar-for-dollar federal tax credit worth 26% of the cost of your entire solar installation. According to the SEIA, Solar Energy Industries Association, the solar industry has grown “52%” since the ITC was passed. The ITC has been purported to be a significant factor in increasing solar installations and capacity. This has quite possibly become the single greatest incentive to go solar. Lawmakers understood the importance of the federal solar ITC. Expect additional policies and legislation to be passed to help incentivize the conversion to solar energy. President-Elect Biden and a new Congress look to build on their promises of promoting renewable energies. The government may be looking to convert public institutions to solar power to relieve costly fossil fuels. Don’t be surprised if additional federal, state, and local/municipal incentives are passed to help reduce costs for prospective buyers.
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Peter Eavis and Ivan Penn of the New York Times wrote that “The home solar business is growing fast as thousands of homeowners install panels on their roofs to save money. Yet the biggest companies that install and finance home solar systems are reporting hundreds of millions of dollars in losses.” Interestingly enough, the smaller installation companies have been turning a profit for years. One of the main reasons that the major companies are losing money is that the significant installation companies such as Sunrun are continually growing. Eavis and Penn quoted Lynn Jurich, the chief executive of Sunrun, “You are always going to be negative if you are growing.” Eavis and Penn continue:
“For now, Wall Street investors are bidding up the companies’ stocks in the belief that solar companies will be able to borrow cheaply and cover their losses and cash outflows for some time. They also expect sales to grow fast as homeowners buy larger solar systems and home batteries to protect themselves from blackouts and electric power vehicles… Sunrun announced a deal in July. That acquisition of Vivint has helped push Sunrun’s stock up over 400 percent in 2020. Sunnova’s stock was up over 300 percent… Investors are also expecting the incoming Biden administration to do more to spur the use of renewable energy through tax credits and other incentives.”
Solar has been booming in response to the early diminishes experienced by Covid-19. Installations, hirings, and stocks are all trending upwards. This is excellent news for solar in 2021. To learn more about going solar, or to receive a free quote, click here.