The Cost of Solar Continues to Drop
Across the country, people are adopting solar energy faster than ever before. Although there are many reasons why, one of the biggest motivators has been the steadily declining cost of solar energy. A solar energy system helps save money on electricity bills, so any drop in the cost will ultimately result in lower overall energy costs.
Global signs of declining solar costs
Around the world, developers are installing different types of solar panels and arrays highlighting just how far the cost of solar has dropped. In a span of only five months, two new installations illustrated how the cost of solar declined about 25 percent – reaching an all-time low in the cost per kilowatt-hour.
One of the reasons for this aggressive price drop is that solar manufacturers are learning how to use better technology to cut the costs of equipment. As a result, places like the northeastern U.S. saw the price of solar panel deliveries drop by 25-30% between the first and third quarters of 2016.
Frank Wouter, the former director of renewable-energy investment company Masdar Clean Energy, said, "There's no reason why the cost of solar will ever increase again."
In his keynote address at the Bloomberg New Energy Finance annual conference in April, BNEF Chairman Michael Liebreich explained how long-term deployment programs in the solar industry have created such an optimal price environment.
"We've seen the costs come down by a factor of 150 since 1975," Liebreich said. "We've seen volume up by 115,000."
The declining cost of solar around the world suggests where the overall industry is heading. For instance, analysts project a new 100MW solar array in Nevada to deliver electricity at $0.04/kWh. This is a major drop from the current average cost.
Low costs make solar more accessible
Falling solar energy costs will continue to provide a greater incentive for homeowners to install rooftop solar systems. It’s tempting to keep waiting for prices to keep dropping, but the longer you wait the longer you’ll be paying more for your electricity than you need to.
With $0 down and low monthly payments, a solar system from Sunnova can save you money the moment it’s turned on. Plus, every Sunnova system is backed by a 25-year, panel-to-panel warranty that covers every piece of the system and the labor to replace it, if necessary.
We do this because the best way to save you money is to ensure your system is producing clean, affordable energy. To find out more about solar and to find a plan that fits your needs, click here.
3-D Printing Solar Could Revolutionize Renewable Energy
Scientists and engineers continue to find creative ways to generate cheaper options for solar power. One promising new technique is 3-D printing solar cells. The 3-D printing process has the potential to pave the way for a revolution in solar power generation, reducing costs, improving efficiency and removing barriers to the adoption of residential PV systems.
3-D printing solar changing the game
As noted by Greener Ideal, solar panel efficiency and cost are two of the biggest obstacles to bringing this clean, renewable energy source to the mass market. While expenses have dropped in the past few years as efficiency has risen, the upfront cost for installing a residential solar system may still make some homeowners skeptical, despite the long-term savings gained from lowered electricity bills after installing a solar system.
Thankfully, scientists have developed a way to boost efficiency while lowering the cost of solar panels. The development, advancement and adoption of 3-D printing technology has opened the door for using this process to print solar cells. This technique involves a large industrial printer creating a long film or roll of solar cells that is flexible and easily shippable. While this method is largely confined to companies with industrial 3-D printing capacity, it's not a stretch to see how these low-cost and high-efficiency factors could quickly make this technology more easily available to the average homeowner.
From cars to homes to manufacturing components and everything in between, 3-D printing technology is bringing the production of nearly everything to the masses, and the solar industry is taking note. Ohio University listed both 3-D printing and alternative energy as two of the six industries primed for significant growth in the near future. This suggests the point where these two sectors overlap should see tremendous investment and innovation.
The many benefits of 3-D printing solar
The 3-D solar cell-printing process a less expensive method for creating solar panels. By bringing down the cost, this makes the technology easier to produce. Some estimates project a drop in price of 50 percent after eliminating the costs of expensive materials such as glass and polysilicon, and eliminating pricey overhead for shipping such fragile products.
3-D printed solar panels are also much more efficient than traditional modules. According to 3Dprint.com, British scientists at the National Physical Laboratory recently 3-D printed solar cells that actually perform better during cloudy conditions.
Another benefit 3-D printing solar panels may offer people is the ability to create customizable solar panels from the comforts of their own home. While the technology for individual production is still somewhat limited, the potential for 3-D printing solar could provide a way for just about anyone to become a self-sufficient energy producer.
Even though solar manufacturers continue to push the boundaries on solar panels through innovative 3-D printing techniques, there's still no reason for homeowners or commercial end users to wait on installing a solar panel on their houses or businesses. No matter how much the technology evolves, the sooner someone installs a solar PV system - no matter the process by which the panel is constructed - the quicker they'll start saving money on their utility bills.
Do Changes to Net Metering Policy Mean the End of Residential Solar?
The widening adoption of residential solar is upending the hundred-year-old utility business model. Helped along by laws that find a balance between consumers’ and utilities’ needs, some utilities are embracing this change. But, some aren’t.
For those utilities fighting against residential solar, their argument focuses on something called net metering. Solar systems produce energy whenever sunlight hits the panels. Sometimes that energy is produced and it can’t all be used in the home. When this happens, the energy is sent onto the electrical grid to help power other homes and businesses. Net metering is when you, as a person with a solar system on your roof, are credited for the energy you send onto the grid. Essentially, net metering means that residential solar systems are miniature power plants providing clean, safe energy for others to use.
The argument made against net metering is that it lowers bills for solar-powered homes, shifting power infrastructure costs to non-solar customers. In Nevada, this argument was effective in changing the rules around net metering for a period of time and solar growth essentially stopped in the state. This led some analysts to believe that the end of net metering will mean the end of residential solar.
But it’s not clear that net metering is ending.
The overall benefits of net metering
Despite the grim picture some utilities paint of net metering, many studies have found that it’s not just homeowners with solar systems seeing benefits from net metering programs, but everyone using the grid in that region. Consider, for example, the following:
- A recent study conducted in California, the state that generates the most solar power in the U.S., found that the current net metering program generates benefits for all residents in the state and did not create any additional costs for ratepayers who did not have solar systems.
- Researchers in Missouri conducted a cost-benefit study of net metering and discovered the program benefits every customer, regardless of whether they have their own solar systems. Although the study's authors did not quantify the net effect of net metering, they concluded that it is positive.
- The Environment Massachusetts Research and Policy Center conducted a review of 11 recent analyses of net metering in the state. The Center found that these programs deliver greater benefits to the grid and society through avoided energy costs and investments, reduced financial risks and electricity prices, increased grid resiliency, a decrease in harmful pollution and a boost in the local economy through more jobs.
Importantly, Nevada, which ended its net metering program in January 2016, is reversing course. The public utility commission grandfathered more than 30,000 solar customers who had solar before the change to net metering. And, the governor’s Energy Task Force has recommended that the state bring back net metering to all solar customers, present and future.
The Brookings Institution notes that regulators in at least 10 states have conducted reviews of their net metering programs and found that net metering benefits all utility customers. As studies continue to show the benefits of net metering, we believe this program will only continue to grow in popularity.
Rooftop Solar Adoption is Growing So Quickly, It's Contagious
All across the country, solar panels are popping up faster than ever. In the past forty years, more than 1 million solar photovoltaic systems have been installed, according to the Solar Energy Industries Association, and another million are expected in just the next two years. In fact, this year the U.S. is expected to add nearly double the amount of solar added in 2015.
What’s driving this surge in demand for solar? The growing popularity of solar power can be traced to two converging factors: the increased ease of owning or leasing a solar PV system combined with the added financial value homeowners gain from installing one. In addition, once neighbors and friends see the savings from a rooftop solar system, they’re more likely to install a solar system too.
The Contagion Effect
Studies show that once one person installs a solar system, their neighbors and friends are quick to jump on the solar bandwagon. A study on rooftop PV systems in Connecticut discovered that when one person installed a solar system, installations within a half-mile radius increased, on average.
Similar studies on homes in California also imply a sort of “contagion effect” on neighbors and friends of people who have already installed solar systems.
The continued rise in installations will only become more contagious as solar power’s many benefits become more apparent. Already, as reported by Vox, analysts estimate that homeowners in the U.S. install a new rooftop solar system every four minutes. And there’s good reasons for this so-called “contagion effect”, too.
”People all across the country are reaping the benefits of going solar.”
People all across the country are reaping the benefits of going solar. Even in places not known for abundant sunshine, people are embracing solar power and saving money.
While you’d probably expect California to be the state with the most solar in it (it is), you wouldn’t necessarily expect New Jersey, Massachusetts and New York to be ranked second, third and fifth, respectively. But they are. That’s because the most compelling reason to go solar is the savings. And savings are contagious.
Solar has never been more accessible
With a variety of no money down solar as a service plans to choose, from lease to power purchase agreements to ownership, going solar is accessible to more homeowners than ever before. Some of the most common options are:
- A lease with fixed monthly payments and no option to own the solar system.
- A power purchase agreement (PPA) with fixed rates and an option to own the system after a predetermined amount of time.
- A PPA that has fixed payments over 12 months with annual adjustments based on product and an option to own after a predetermined amount of time.
- A fixed monthly payment plan with the homeowner owning the system.
Long-term, locked-in energy rate
Not only is solar one of the most abundant sources of power available, it’s also one of the more affordable. Unlike the rising costs of electricity from traditional utility companies, most solar service agreements lock-in a low rate throughout the life of the agreement.
This can potentially save homeowners a significant amount of money on their electricity bills. With additional performance guarantees and operation and maintenance coverage for the duration of the agreement, it means the buyer gets all the benefits from the solar system and none of the risks.
Hundreds of thousands of homeowners throughout the country are saving money by generating their own power through solar. Solar isn’t contagious simply because it’s the right thing to do by the environment, it’s contagious because people see the difference in their energy costs. Find out how much solar can save you by clicking here.
Solar is Changing the World and These States are On Board
Electricity has been produced and sent to your home in almost exactly the same way for over a century. For the most part, electricity is produced at a power plant by burning coal or natural gas, then sent over wires to your home. Altogether, the system of power plants, wires and homes and businesses is called a “grid” and right now it’s a pretty inefficient system that produces a lot of waste and quite a bit of pollution.
But that’s changing.
Electricity grids are complex systems managed by regional system operators and public utility commissions. Historically, they’ve been one-way systems: power is produced at power plants and sent through transmission wires to homes and businesses. The main goal is to make sure that enough electricity is available across the entire grid to meet fluctuating demand.
Increasingly, grids are becoming two-way systems, where electricity is produced not only at power plants, but at homes and businesses as well. Driving this change to a two-way system is what’s called distributed energy resources (DERs), like rooftop solar, batteries and smart appliances. The goal is still to meet electricity demand, but to do it efficiently using new technologies.
After all, it doesn’t make sense to get your power from a plant that may be 100 miles away, when your neighbor’s solar system is 100 feet away and produces more power than they need at any given moment.
And it’s not just rooftop solar driving this change. Smart thermostats, appliances, energy monitoring and batteries are making it possible to control and understand energy consumption like never before.
To keep up with and take advantage of the technological changes, a handful of states are changing how they utilize the grid. Here are some of the more exciting initiatives taking place in the U.S.
New York: REVing Up
New York is rethinking their energy system through an initiative called Reforming the Energy Vision (REV). REV’s goals are to save customers money, improve grid reliability, promote local power generation, and bring new products and services to customers.
One way REV is accomplishing its goals is by changing the incentives for utilities. Instead of spending hundreds of millions of dollars on new projects, utilities are encouraged and paid to lower customer energy use, promote on-site energy production (like rooftop solar) and employ grid management technology. In just one example of REV at work, a large utility was able to save $1 billion on building an energy substation, while still meeting energy demand. Ultimately, that’s $1 billion customers across New York won’t have to pay.
California: Solar Nixes 13 Expensive Projects
It’s no surprise that California is the top-ranking state when it comes to solar power. Hundreds of thousands of homes and businesses are using solar panels to produce their own clean, renewable power. But, solar doesn’t just provide environmental benefits. Thirteen planned projects for building or improving transmission lines (that is, wires) have been cancelled because solar is now meeting electricity demand in the areas where the projects would have gone. The savings to customers? $192 million.
Minnesota: e21 and the Modern Grid
You probably expect New York and California to be leading the way on adopting new technologies. But, Minnesota’s not sitting by either. With an initiative called e21, the state is looking at modernizing its grid to adapt to the change in how we power our homes. The goal of e21 is to make utilities more customer-centric. That’s a fancy way of saying that the grid is becoming a two-way system and customers (like you) should be treated fairly. e21 is a realization that the future of energy production and consumption will include DERs, like solar, and customers will become more active participants on the grid.
You Don’t Need to Wait for Change
Exciting changes are underway as states increasingly recognize the need to modernize how we treat energy production. Our grids need to be smarter and our resources need to be managed more effectively. Change can be challenging. But as New York and California have already seen, change can be rewarding, too.
Luckily for you, you don’t need to wait for your state to realize change is coming. You can start being a part of the energy future, today. By signing up for solar as a service you can save money and take more control over electric costs. It’s time to start having a say in how your home’s power is produced.
Solar Loans – a growing choice in the solar industry
People looking to go solar have more options than ever before. While leases and power purchase agreements (PPAs) are the most popular options for homeowners, many are choosing to finance the purchase of a system through a solar loan. The popularity of solar loans is in part due to the Solar Investment Tax Credit (ITC), which gives the owner a tax credit of up to 30% of the cost of a solar power system. To meet this popularity, a number of new loans are available with terms from seven to 25 years and interest rates from 2.99% to 9.99%.
Because of the wide range of solar loans on the market, it is important to know your options before buying a solar system. You’ll want to make sure you understand what your loan entails, how the payments are structured and whether or not your system is covered by a performance warranty. Also, you’ll want to make sure that you’re eligible to take full advantage of the federal investment tax credit.
How most loans work
Most solar loans assume the customer will apply their 30% tax credit to the loan. The loans offer low initial monthly payments for 12 to 18 months, with the possibility of keeping the payments low once the tax credit is applied to the loan. If you choose not to apply the ITC to their loan, your initial monthly payment will increase significantly. And, in the case of some loans, the interest rate will also increase from a low initial rate to a high, almost credit card-like rate.
You should know that while you may initially save money on your energy costs, if you don’t apply the tax credit to the loan, you’ll likely pay much more to power your home.
It’s not just about the tax credit
Compared to leases and PPAs, the appeal of solar loans is that you can claim the federal tax credit.
While the promise of a 30% tax credit is appealing, when considering a solar loan you should be aware that not everyone can claim the full tax credit in the first year. If you sign a solar loan but cannot claim the full tax credit in the first year, the prepayment will still be due — potentially leaving you without the money to pay it.
Another consideration to keep in mind when taking a solar loan is that a warranty on the performance of the system may not be included. Without a warranty on system performance, you can’t be sure that your system is producing the power you need. And, potentially costly repairs to keep your system producing are your responsibility. Don’t expect your loan provider to take care of anything. They’ll probably point you to the initial installer, who may or may not be available to make any repairs years from now.
While most loans will allow you to pay off the loan early without penalty, many loans do not allow you to transfer the loan. So if you decide to sell your home, you should plan to payoff that solar loan. In fact, not paying off the loan could make it impossible for you to sell your home. Most loans include a security interest giving the creditor the ability to prevent the sale of your home while the loan is still in effect. An early payoff in order to sell your home means that you end up paying more for the power your system produced, and the next owner of the home will reap the benefits of the power you paid for.
So what should you do?
The most important thing you can do to ensure a solar system will work for you is to understand your options. Read every contract you’re presented and ask questions. Make sure you understand how the payments work, whether or not the system performance is warrantied and what happens if you decide to sell your home.
With tens of thousands of systems on homes everywhere from Hawaii to Massachusetts, Sunnova is one of the largest solar providers in the U.S. One of the things that we have learned is that while solar systems are extremely robust, they require monitoring and maintenance to ensure homeowners are getting the most out of their systems. That’s why, whether it’s a loan or a lease, we include a comprehensive performance warranty on our solar power systems.
When considering adding solar to your home, be sure to ask yourself what is important to you. If you are looking to lower your power bill and want as little involvement in the process as possible, a lease or PPA is probably the right choice for you. If you want to take advantage of the ITC and own the system, a loan is probably a great choice for you, just make sure you know what is in, or not in your loan agreement.
For more information on the solar options available to you, visit our Solar Plans page.
The Solar Investment Tax Credit Sounds Great, But Is It Really?
Some things to consider before you purchase a solar power system
Late last year, the U.S. Congress passed an extension to the renewable investment tax credit (ITC). The ITC gives homeowners the potential to receive up to 30% of a purchased solar system’s cost back on their taxes. It sounds like a great idea: make the right choice and get some money back. But it doesn’t always work out that way.
For starters, not everyone is eligible for the tax credit. Only people who file a tax return and pay federal income tax qualify and that’s not as many people as you might think. According to the Tax Policy Center, a little over 45% of Americans either did not file a tax return or pay income tax in 2015 and that’s not just the unemployed and underemployed, it also includes people whose deductions, like child and mortgage interest tax credits, outweigh their income tax.
Even if you do pay income tax, you may not get the full 30% of the ITC at one time. As a tax credit, the ITC is non-refundable, meaning that if the tax credit is more than what you owe in taxes, the difference will need to be carried over to the next year. So if you owe $2,000 in taxes and your tax credit is $7,500, you won’t get a check for $5,500. Instead, you’ll need to wait another year and file for the balance of your ITC. If that’s the case, it’s recommended you enlist the help of a tax professional to ensure you take full advantage of the tax credit.
Furthermore, as with anything tax-related, timing is important. The ITC can only be claimed once your solar system starts producing electricity. So, even if you start paying to have a system installed in late 2016, but it does not produce electricity until 2017, then you’ll need to wait until 2018 to claim it on your taxes.
Finally, it’s important to know all of your options when it comes to solar. You may think that, in order to take advantage of the ITC, you need to buy a solar energy system outright. But that’s not the case. Sunnova’s EZ Own plan allows you to own the system with no upfront cost and an equipment warranty to ensure your system is producing for many, many years. If you’re looking to take advantage of the ITC, but aren’t ready to invest in a solar energy system, EZ Own may be ideal. To learn more about Sunnova’s EZ Own plan, simply click here or give us a call at 855.277.6379
In a future blog post, we’ll cover the importance of having a warranty on your solar energy system. So stay tuned.
* Sunnova does not provide tax advice. Contact your personal tax advisor for information regarding the federal investment tax credit eligibility.