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Crystal ball or fact? The solar HORIZON for 2014.

Predictions for rooftop solar POWER in 2014.

1. Initiatives towards net metering will be successful in the larger states but unsuccessful in the smaller states. SEIA and Vote Solar have worked tirelessly to make a difference, but ultimately it comes down to those voters that have solar, or want more. Because of this it’s the states with the largest constituency of solar users that will be highly successful in ratifying policies that are friendly towards solar. What the solar industry thus has to learn is that extensive grassroots support along with lobbying are the most effective tools. It’s those on the ground seeking net metering that will earn success.

2. There will be no comprehensive changes or extension with the ITC throughout 2014, despite the fact that all aspects of the industry are seeking to do so. The ITC of 30% is a primary factor in those states where solar is already enticing like in Hawaii or California.  There is not another federal policy that is as useful and effective for systems that are both customer and third party owned.

3. The commissions of public utility will tepidly float alterations to the current business models of the utilities. Despite the drive towards high and guaranteed return rates for these utilities, the affordability and effectiveness of solar technology will prove irresistible. The word “tepidly” is used to indicate the fact that the lobbying and litigation capabilities of the utilities will certainly work hard to retain their current profitable models of business.

4. Utility companies owned by investors will become less and less profitable over the next couple decades. Elements including a slowdown in the expansion of electricity sales, declining generating capacity, increased rates of borrowing, uncertainty in the markets, more affordable substitutes for power like solar and win, and the increased usage of more local battery storage will push the price of these stocks down. There’s little for the utility companies (besides EVs) to be happy about these days, and we certainly don’t expect them to be rational towards DG solar in the future.

5. Paperwork for the implementation of solar will become simpler in some place, but more difficult in other places. A prime example of simple and manageable solar permits that can be found over the counter is San Jose, California. Also PG&E has been incrementally introducing procedures to increase the turnaround to less than a week’s time. However, such improvements are on a local level, and often temporary. Beginning in 2014 San Jose introduce new limits to the fire code that puts strict limits on solar rooftop installments  which will reduce some of the most useful available space by 30%. It’s often a case of taking two steps forward just to take one back.

6. The price of solar equipment will across the board sustain its decline. The current trend predicts that we will meet the <$0.50/watt module target for costs set by GTM. However, the fact that solar manufacturers become more profitable doesn’t necessarily denote the meeting of this goal. Companies that sell at the highest prices will remain to sell to the quality crowd. Still, considering the supply still exceeds the demand, these premium prices will have to decline as there will be other manufacturers that sell at more affordable prices.

7. The cost of acquiring solar for customers will remain high. At the moment when the overhead of sales is included this cost is about $1/watt. Cutting edge gen services, improved software, and new strategies of prospecting are still not likely to bring down these costs significantly, largely because there are too many intelligent and profitable companies out there who aggressively market themselves and increase their top line. Considerations that will at some point bring these costs down are a standardization of solar equipment, more awareness on the part of customers or comparable prices and benefits, lower incentives, and an increased base of solar so people can refer others (this is the effect that has had such an impact on the German solar market).

8. The smaller solar companies will be able to share the market with the bigger installers downstream. The little guys may lose some business due to the waves of marketing across platforms, but they will survive. Ultimately the smaller installers will thrive due to the fact that they often keep their costs of operation low and levels of service high. New options to finance, which include bank loans and credit unions, will simplify the process for local installers to maintain competition with the bigger, free upfront companies.

9. The older distributors will consolidate their business, whereas new distributors will enter the market. Overall the entire solar distribution business will be further streamlined with the standardization of solar installation components. We have not yet reached this point, now the multitude of available specs and products make the competition too stiff for distributors to stock facilities of distribution comprehensively and locally. When this type of product availability is made local it will incrementally improve the efficiency of every aspect of the supply industry.

10. The focus on the tedious components of industry like solar roof flashing, grounding, racking, the chain of supply and preparation for each task. An excellent new time and motion study for rooftop solar installations was conducted by RMI and Georgia Tech. They found that the best way to bring down costs are with the integration of racking, eliminating all the little parts like nuts, bolts, wires, clips, pieces and aspects that don’t functionally improve the value or efficacy of the system but are still necessary for assemblage.

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar brokering, brokerage, and solar energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties.  For more information, please visit www.SunSourceSolarBroker.com.

 

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