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Driving Forces in The Solar Industry

There are four key factors that will dictate the future of solar and the speed of implementation both for commercial and residential use.

First, there needs to be a better sense of incentives for utility-based REC programs. RECs are the credits earned by the home or business owner for the electricity produced and sold back to the grid. These programs vary from state to state because the power industry is mostly private and semi-decentralized and each company sets parameters for the credits. A solar company in the tri-state region has to contend with different incentives for CT, NY and NJ. Even within the states, there are variances. What may be effective for upstate NY may not work for Long Island. This makes it difficult for all parties involved. The solution would be to further federalize the incentives but it doesn't seem likely as the current 26% ITC is scheduled to drop to 10% within a few years.

The second factor is the transmission of electricity across long distances. If it were possible to produce solar electricity in Arizona and ship it to Minnesota then the customer would be able to shop for the best rates as opposed to being forced to purchase from just one provider. Currently, however, that is not possible...not because of the laws in place but simply because too much energy is lost over long transmissions for this to be an effective solution. The solution is possible but would include reinforced lines, additional transformers and a whole new approach to the supplier/client relationship. More likely, the solution will be large scale solar farms built across the country, offering the opportunity to tailor the solution to the needs of the community. Also, this would offer security in the form of redundancy.

Thirdly, The actual costs and efficacy of the panels continues to drop but it needs to drop further still. Solar projects are affordable to most, but not to all. Without the current level of federal and state incentives they would hardly be affordable to anyone. Additionally, the renter is also at a loss as there are hardly any options to reduce electricity costs by using renewable energy if the consumer doesn't own their facility or home. Interesting enough, 36% of the nation's 122 million households rent. Without an energy solution for tenants, full adoption of renewable energy will be a much longer process.

Finally, schools should be provided an additional incentive for solar adoption. There are thousands of ideally situated, flat roofs available full of unrealized solar potential. Solar for schools would not only lower a major yearly expense, but immediately help fuel school programs which may have been eliminated because of lack of funds. Schools would also have the opportunity to expand the science and business programs to include solar as a part of the curriculum. Teaching the next generation about the benefits and workings of solar will help propel us away from our dependence on fossil fuels. An entire generation educated on the machinations of renewable energy must be a part of the progression to full adoption for the population.


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