You better believe it; the solar industry is stirring.
Solar installations for utilities and U.S. homes have been shooting up this year. Solar companies in general have installed 930 megawatts of photovoltaic solar capacity in the U.S. for the third quarter alone.
A report released jointly Tuesday by GTM Research and the Solar Energy Industries Association said that over half of that went to servicing utility companies, with 186 megawatts going to the residential market – the biggest quarterly gain ever seen in home installations.
The 930 megawatts installed overall represents the second largest quarter for U.S. solar panel installations in U.S. history.
The numbers never lie. And while many of us may have skirted around solar these past few years, maybe it’s worth taking a closer look.
The 930 megawatts from the third quarter is likely to double as the year comes to a close. Total installed power has already grown 35 percent from last year, while utilities projects jumped a whopping 74 percent to 539 megawatts, according to Bloomberg.
If the U.S. can keep its torrid pace, that means it could very well take down Germany as the biggest global solar market in terms of capacity – a title it hasn’t held in 15 years.
But just because solar is having a banner year doesn’t necessarily mean it’s smooth sailing from here on out. The report also indicated that we will see 4.3 gigawatts of new solar panel installations in 2013, down from the 4.4 gigawatts that were previously expected. And in terms of the non-residential market – businesses, government agencies, etc. – numbers will remain flat, with only nine of the 28 states tracked by GTM showing any increase in the third quarter.
As for taking down Germany, its numbers – and Europe’s in general – have been waning as subsidies are being pulled back.
Breaking Records
But you can’t argue with facts. It’s very promising to see so much work being done, and while the third quarter revealed great promise, the most significant numbers are found in our homes.
Homes don’t necessarily have the greatest capacity, but if U.S. residents are starting to embrace solar power, it signifies that the American page in solar energy is starting to turn and doubts are being eliminated. It’s only a matter of time before our business owners see the same benefit.
Not only did we just experience the greatest quarter in residential home installations with 186 megawatts – or roughly 31,000 new systems – but the growth appears to be consistent and growing.
That 186 megawatts is a 49 percent increase from last year. If the fourth quarter can match that, we should ready ourselves for a growing trend across the American landscape.
Standing in the Way
The only thing that will impede the progress of solar is natural gas. There is no denying the shale gas boom and the growing demand for cheap natural gas here in the states.
But that doesn’t mean solar can’t be competitive – it’s just going to need a little help.
On an international level, solar could become competitive with natural gas by 2030 if there is a 39 percent decline in utility-scale system costs and shale gas production hits a few snags, mostly with anti-fracking policies and high capital costs in South America, according to Platts
At the same time, the boom in natural gas could also become a bridge to the use of solar power and other renewable energy. As gas replaces coal and solar costs go down, we could find that solar and natural gas integrate well together, providing a low cost with a stable output.
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The future price of gas will be a major factor in how this plays out. If it remains low, solar could find itself competing realistically as soon as 2020.
It’s a guessing game for now, but truth be told, competing with natural gas will prove tough. It doesn’t help that renewables aren’t getting the same kind of support they were even as little as a few years ago.
Personally, I was surprised by Tuesday’s report, but enthused by it as well. Now I see that even if it is the age of natural gas, there’s a place for solar, too – and it’s growing.
The Play
This may come as a surprise for some of you, but the solar market as a whole has grown between 4 and 20 percent in 14 of the last 15 quarters, according to Bloomberg.
The 49 percent growth in third quarter residential installations has us at an all-time high there. And the best part: as solar gets cheaper every day, we could see a boom around the globe, keeping pace with natural gas.
That boom, along with a little help from wind power, would significantly reduce carbon dioxide emissions and avert the chances of climate disaster.
By the end of this year, there will likely be 400,000 individual solar projects here in the U.S. and more than ten gigawatts of solar power capacity found mostly in California, Arizona, North Carolina, Massachusetts, and Nevada, according to GigaOm.
And it’s spreading. It’s also half the price of diesel oil and is quickly catching up to other fossil fuels.
So, if you’re asking me if solar is a good investment?
Yes! Go, but go long.
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