Solar Trends to Watch in 2016: The Good, The Bad and The Ugly

With the renewal of the Investment Tax Credit and rapid deployment of new solar in Asia, what can the solar industry expect in 2016?

Despite turmoil in much of the energy sector, Fortune Magazine predicts that solar energy will be one of the energy technologies to watch in 2016.  Fortune’s energy mavin Katie Fehrenbacher writes that “…It’s not just the U.S.—China and India are also massive future markets for solar. China is set to install as much solar in 2015 as America has done so far cumulatively. India is a little bit of a wild card as the market has unique hurdles. But in Latin American, countries like Chile and Mexico have growing solar markets, too.”

Across the globe, the solar industry is defying naysayers with solid growth and rapidly improving technology. What will be some of the solar news to watch out for in 2016?

The Good:Solar_panels_on_a_roof

  • Module prices will continue to drop. Supplies will continue to increase, and companies like SunEdison have publically targeted $0.40 cent per watt panels by the end of 2016.
  • Local and regional solar businesses will see big growth in 2016. Unlike the windfarm boom of the early 2000’s which relied on large, national installation contractors, local solar installers are best suited to serve the growing market in 2016.
  • A report by GTM Research forecast that the global market for megawatt-scale solar operations and maintenance (O&M) will reach 237GW by 2018.  With the rapid growth in big solar, there will be lots of opportunities in O&M and asset management on both the hardware and software side.
  • Asia and the Middle East will continue full speed on new solar development, creating more global stability in the solar market. 43 Gigawatts of solar planned in China alone… that is A LOT of solar.
  • The extension of the federal ITC will make it easier for state governments to offer incentives, and even utility companies will no longer be able to ignore the writing on the wall. Look for broader public understanding and acceptance of solar in the U.S. in 2016.

The Bad:tesla-powerwall-battery-mounted-outside

  • Residential battery storage will not be ready for prime time in 2016. After the Tesla PowerWall hype, it’s going to take a few more years to become reality. Expect a lot of smoke this year- and hopefully we’ll see fire in 2017.
  • Rooftop solar will continue to be marginalized as a “boutique” product. Without the impending loss of the ITC, sales will level out or drop . The growth of “Big Solar” is good, but it means less energy independence for individuals and less grid resiliency.
  • Solar policy will not be a hot-button issue in the 2016 election campaigns. Despite the strong growth in the renewable energy market, Republicans will continue to mischaracterize solar, and Democrats will be afraid to stand up to the fossil fuel industry and Wall Street. This could be bad…or it could get ugly.

The Ugly:uk-solar-flag

  • Utility companies will continue to lobby state regulators for onerous and unjustified fees for rooftop solar owners. Hopefully, grassroots solar activists will prevail in fighting discriminatory policies, as they did recently in Wisconsin.
  • The cooling Chinese industrial economy will take down several Chinese solar manufacturers. This could be seen as a good thing, weeding out some of the shaky players in the business, but a lot of other companies could get bruised in the fallout.
  • The UK government dealt a “hammer blow” to the British solar industry just a week after the Paris climate summit. If Prime Minister David Cameron does not reconsider these cuts, the UK is going to have a very hard time reaching its carbon reduction goals.
  • Utility companies will continue to work with large solar firms to develop distributed energy resources (DERs) that will attract corporate buyers, shared renewables developers, and mainstream energy sector players like Warren Buffett. The worm has turned, and formerly anti-solar forces will look to move in and muscle out smaller, local developers and installation companies.

For better or worse, the solar industry is maturing, and that will bring new opportunities for some, and others will fall by the wayside. On balance, look for a stellar 2016 in the solar sector.
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About the Author: Rich Dana has spent the last 18 years in and around the solar industry. He is a former energy specialist at the National Center for Appropriate Technology and senior partner at Plan B Consulting LLP. His clients have included GoSolar, ReneSola, Bergey Windpower, The Union of Concerned Scientists, Alliant Energy and the USDOE.

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