Energy from the sun is plentiful and reliable. There is no doubt that the technology works. Although the panels and the installation aren’t free, solar energy’s adoption will pay for itself. Solar energy is a cleaner, cheaper form of electricity. One significant change that we have seen is the impact that COVID-19 has had across the world. With how the world has changed with COVID-19, we see substantial differences in how homeowners view their electricity costs. Here, a run-down of our top five solar trends.
With solar panels, you will be able to reduce the cost of your electricity bills. However, to gain the full benefits of solar energy, a battery backup makes sense. Notably, as we see more power outages, many homeowners are starting to ask for their solar panels to be coupled with a battery backup option like the Tesla Powerwall. With a battery backup, you can store enough electricity to power your critical loads. Even during a power outage, your solar energy system becomes a direct electricity source that can recharge your batteries.
We see a more significant number of battery backup options for AC and DC-coupled systems. Previously, the industry’s two biggest battery names have been the LG Chem battery and the Tesla Powerwall. We are now starting to other major solar manufacturers move into the Energy Storage System (ESS) space. Companies like Enphase, Generac, Panasonic, and Q Cell come out with their battery backup solutions. Adopting more choices means that the battery backup cost should come down considerably as more competitors start to emerge.
The cost of solar panels has started to stabilize. The cost of solar panels only decreased by roughly 3-5% this year. However, we see that the most significant changes to cost will be on the battery side. Just like how solar panels’ price fell substantially before they stabilize, battery backup cost will do the same. We currently see the cost of a battery, including labor, at $1,000 / kWh. We believe that in less than five (5) years, that value will be closer to $500 / kWh.
One of the most significant benefits of home solar panels is the Federal Investment Tax Credit (ITC). The Federal ITC is commonly referred to as the Solar Tax Credit. 93% of the customers we surveyed mentioned the Federal Investment Tax Credit as one of the primary drivers for adopting solar this year. Homes that installed solar energy systems in 2020 will receive a Federal Tax Credit for 26% of the system’s cost. This stepdown tax credit has been one of the primary drivers for homeowners to adopt solar. In December 2020, the 26% Federal Tax Credit was extended for 2 (two) more years. Having a 26% Federal Tax Credit means that if you were to purchase a $20,000 solar energy system, you would be eligible for a $5,200 Federal Tax Credit.
After COVID-19, numerous utility companies are starting to raise prices at a higher rate than ever before. Southern California Edison is raising their rates post COVID by 14.4%. By finally having another option for your primary electricity needs, you can reduce the cost of your electricity bills. Solar systems are widely used as the primary source of electrical power for homes and commercial establishments. Solar energy can sustain your daily needs by charging cellphones, powering up televisions, and getting your laundry done. Your solar panel system can support your home’s electrical needs and ensure that you pay a cheaper electricity cost in the future.
The biggest hesitation for most consumers is their solar company no longer being in business. Typically solar panel repair and maintenance aren’t very demanding if the solar energy system is installed correctly. However, when it does happen, the costs can be relatively high since you need a skilled electrician to service your solar energy system. This is why we are seeing more homeowners purchase solar panels with labor warranties if the solar installation company is no longer in business. This year at Forme Solar, we noticed that 78% of our solar panels sold were from solar panel manufacturers that included a labor warranty like LG, Panasonic, and REC.
These trends all point to faster adoption of solar energy and battery backup in 2021. Battery backup, updated regulations, and solving most home consumers’ pain points should make the year 2021 an incredible one for the energy industry.