Copyright 2018 - The Energy Show - Barry Cinnamon
There are there are three market segment pillars of solar in the U.S. There is residential, utility and commercial. Residential has been growing steadily even well before I started getting into the business in 2001 and one of the reasons is because homeowners pay the highest electric rate so economics are really good. The lowest residential rate is around $0.37 a kilowatt and these rates go over $0.50. There is also easy solar installations and easy financing so the industry on the residential side has been growing steadily.
I did some rough math and this year, we expect to install 5 to 6 million solar panels on homes in the U.S. But the biggest section by far is the utility segment. These are utility companies putting in solar panels instead of natural gas plants and certainly instead of coal and nuclear. So they are completely offsetting the investments utilities use to make in new power plants and what’s happening right now is the economics of solar combined with battery storage are so favorable, that three or four years from now, when new power plants go in, the utilities are realizing it’s cheaper to put in a utility scale solar panel array with battery backup then it is to put in a natural gas combine turbine which is historically been the cheapest most efficient solution. That’s pretty amazing and the prices of solar and storage will continue to go down.
The utility segment is huge. At rough estimate, about 20 million solar panels are going to be installed by utility companies in the U.S. this year. And one of the reasons this is such a fast growing market is the utilities get paid by rate payers to put in more solar panels. The more solar panels they put in the more money they make because the more assets they have. A real change from the not so distant past.
The third segment which has been steady but not growing as fast has been the commercial segment. Big money saving potential for businesses that are paying around $015 - $0.20 a kw for electricity and they big flat roofs, big energy consumption but it’s limited because a lot of buildings are leased so a landlord doesn’t want to invest in solar because they are not paying the electric bill. But if it’s an owner occupied building, then the landlords are much more interested and also, for tenants that are going to be staying in the building for a long time, say a ten year lease, they are happy to put in solar if they are going to get a six or seven year payback. Ballpark –about 3 to 4 million solar panels were installed on commercial buildings this year and it’s just going to continue to grow because there is so much potential there. Just fly over any city and you see acres upon acres of big white flat roofs all over the country.
When you look at who is putting these systems in, there are national retailers like Costco, Staples, Best Buy, Wholefoods, Safeway. There are tech companies like Microsoft, Apple and Google. There’s companies putting in these systems for datacenters and once these companies start putting in a few systems, they realize the benefit and expand to other buildings they operate in.
Now what is happening is the momentum is trickling down to small and medium companies that don’t own a lot of buildings but they are installing rooftop solar and realizing tremendous benefits. So that is where the market is. It is the biggest untapped market in the U.S.
To learn more about solar panels, mounting systems, inverters, system monitoring, financial incentives and resulting economics of rooftop solar for small and medium businesses, Listen Up to this week’s Energy Show.
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