In the U.S. solar power continues to lead all categories as the renewable energy mode of choice. Last year, it made up 29 percent of all new electricity capacity, second only to natural gas at 46 percent. In 2014, solar power is projected to grow by another 26 percent, according to GTM, a research firm. The Department of Energy expects solar to provide 27 percent of all electricity in America by 2050, a huge increase from its less than one percent total today.
What’s driving this growth? Until recently, federal loan guarantees and state subsidies were given as the answer. But many of those initiatives have expired. One of the largest remaining ones, the federal government’s solar-investment tax, is scheduled to drop from 30 to 10 percent in 2017. But analysts expect this change to result only in a drop off of marginal projects. It’s another drop that’s driving today’s solar power market: a rapid and steep decrease in the cost of photovoltaic panels. Electricity customers are now recording big savings with much cheaper panels on their houses and businesses. New regulations and financing models have also spurred solar’s growth. 22 states now allow consumers to buy electricity produced by solar panels installed by a third party, eliminating large up-front costs. 43 states now allow net metering, which credits solar homes and businesses for the excess energy they sell back to the grid. Lower costs, innovative business models, and forward-looking government policies: sounds like classic capitalism in action.
I’m John Howell for 3BL Media.
