Rooftop Wars are Brewing as Solar Wars Heat Up
Although solar power represents the fastest-growing share of new electricity capacity, it still accounts for just three percent of the total U.S. electricity generated. And only three percent of homes in the U.S. have solar panels, compared to 20% in Australia.
Two companies, in particular, are trying to raise that U.S. number – one rooftop at a time.
Tesla is arguably the most influential and visible of the two, having purchased SolarCity, the early industry leader in rooftop solar panel systems, in 2016.
Sunrun, founded in 2007, is the other major player. For years it has been the leading supplier of residential solar panel systems and it widened that lead after its purchase of Vivint Solar Inc. in 2020. It’s possibly being overtaken by Tesla, though, based on the megawatts of solar Tesla has deployed over the past 12 months.
Rooftop solar panel technology is an example of a distributed energy resource (DER), meaning it’s a localized, relatively small power source that’s located apart from a major, centralized power plant. DERs can be a single home or a mini, localized, renewable power station (solar or otherwise) serving a neighborhood or community.
Energy Independence at Home
Tesla, especially, is touting a comprehensive approach that links its rooftop solar panels to its energy storage battery product called Powerwall. In fact, in true Elon Musk style, the company recently announced you can’t buy one without the other. Essentially, Tesla is selling a “powerplant” home kit that generates and stores power for use in that structure, and delivers excess power back into the electricity grid – known as “net metering.”
While less splashy, Sunrun also offers a similar battery-enabled home energy storage system.
At-home storage of power captured from solar panels is critical, relatively recent expansion of solar residential technology services. It’s especially piquing the interest of homeowners in California and Texas who last year faced extended power outages due to wildfires and ice storms, respectively. Blackout-proofing is a powerful sales pitch!
The economics of residential solar are getting better, too. Installation costs continue to go down, and late last year the federal investment tax credit of 26% of the cost of installation was extended by Congress for another two years. A similar credit is available for commercial building solar panel installation.
The Bigger Picture
The rooftop solar technology addresses two major future-related situations. First, there is an increasing electrification of our life, including our cars and our appliances. Second, we clearly need to minimize carbon emissions from traditional power generation in the face of climate change trends.
In short, we need more clean electricity and that means we need more clean electricity producers – large and small, in other words, solar farms and solar roofs.
But technology breakthroughs, societal imperatives, and government bureaucracies don’t always work in lockstep. For many years, state and local permitting delays for rooftop solar panel installation have been a concern and an anchor on the residential solar industry. However, a new federally funded web app available to local governments may help with that. California is an early adopter.
The Trends are Up
Thanks to those natural disaster-driven blackouts, and no doubt also to homeowners with time and cash on their hands during the pandemic, solar panel installation was up 43% in 2020 compared to the previous year, according to the Solar Energy Industries Association (SEIA). That produced 19.2 gigawatts of new energy capacity – and one gigawatt can power 190,000 homes. The U.S. currently has about 97.2 gigawatts of installed solar capacity and SEIA predicts that by 2030, solar installations will quadruple from current levels.
And the Future is Up Too – Literally
We’ve only scratched the surface when it comes to capturing solar energy with our panels. The panels themselves are being improved. Experts say that many of the early panel systems in use today are less than 15% energy efficient. They’re stationary and can’t be adjusted to follow the sun. Breakthroughs in construction and materials will improve the efficiency of newer models.
After all, there’s a lot more solar energy out there, and up there, for the taking. The earth is blasted with more than 173,000 terawatts (one terawatt is 1,000 gigawatts) of solar energy each year – 10,000 times more than we need.
The challenge is to capture some of it and transform it into electricity. There’s some amazing research underway to examine different ways to do this. In next week’s column we’ll look at some that seek to capture solar energy even closer to its source.
In the meantime, Sunrun, Tesla, and others are doing their best to make sure that no ray of light that hits a rooftop is wasted. It’s a fun competition to watch. We all know Elon Musk and his take-no-prisoners approach to markets and competition. Sunrun’s CEO Lynn Jurich has been equally successful taking a different tack, seeing allies in people from all sectors of the energy industry.
Both see the solar rooftop market at a tipping point, where investment in solar energy technology has an incredible upside.
Who will be the winner? We all will.