This is the third post in a series on rooftop solar technology. This post will discuss some of the key legislative and regulatory efforts that are driving this technology and helping homeowners save energy and money on their utility bills. There are several key initiatives – both legislative and regulatory – currently in effect that will assist in the deployment of rooftop photovoltaics: the solar investment tax credit, the U.S. Department of Energy’s Sunshot program and a variety of other innovative, market-driven mortgage products offered by the Federal Housing Administration and Fannie Mae.
Solar Investment Tax Credit
The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the deployment of solar energy in the United States. The ITC was extended by Congress through 2021, which will provide business certainty to project developers and investors. The ITC continues to drive growth in the industry and job creation across the country.
- The ITC is a 30 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties.
- The residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006 – a compound annual growth rate of 76 percent.
- The existence of the ITC through 2021 provides market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn, lowers costs for consumers.
- The Section 25D residential ITC allows the homeowner to apply the credit to his/her personal income taxes. This credit is used when homeowners purchase solar systems outright and have them installed on their homes.
The ITC has proven to be one of the most important federal policy mechanisms to incentivize the deployment of both rooftop and utility-scale solar energy in the United States. As a result of the multi-year extension of the credit enacted in late-2015, solar prices are expected to continue to fall while installation rates and technological efficiencies will continue to climb. The solar industry is predicting that nearly 100 Gigawatts will be installed by the end of 2020. Moreover, the roughly 210,000 Americans currently employed in solar is expected to double to 420,000 in the same time period – all this while spurring roughly $140 billion in economic activity.
Department of Energy Sunshot Program
The U.S. Department of Energy (DOE) Sunshot Initiative is a national effort to support solar energy adoption by making solar energy affordable through research and development efforts in collaboration with public and private partners. SunShot funds cooperative research, development, demonstration, and deployment projects by private companies, universities, state and local governments, nonprofit organizations, and national laboratories to drive down the cost of solar electricity. When SunShot was launched in 2011, it set a goal for solar energy to become cost-competitive with traditional forms of electricity by 2020 without subsidies. This goal set cost targets at $0.09 per kilowatt hour for residential photovoltaics (PV), $0.07 per kilowatt hour for commercial PV, and $0.06 per kilowatt hour for utility-scale PV. According to recent DOE research, the solar industry had achieved 70% of the progress toward the 2020 goals, spurring the department to determine new targets beyond 2020. As the cost of solar comes down, more Americans can take advantage of the clean, affordable power that solar provides.
Aside from these two efforts, there are other national programs and mortgage products that help consumers acquire and finance energy efficiency upgrades, including solar panels, to reduce utility costs:
- Energy Efficient Mortgage – This is a Federal Housing Administration (FHA) loan program that allows borrowers to finance cost-effective energy-saving improvements as part of a single mortgage. These mortgages make it possible for property owners to borrow above the appraised value and stretch debt-to-income qualifying ratios.
- PowerSaver Home Energy Upgrades – This is another FHA program available to homeowners with manageable debt and a credit score of 660 or higher. These loans do not require a home appraisal or lien on the property.
- HomeStyle Energy Mortgage – This is a Fannie Mae program that allows borrowers to make energy-efficient or utility-cost-reducing upgrades within the mortgage when purchasing or refinancing a home.
- Property Assessed Clean Energy Programs (PACE) – These programs allow local or state governments to fund the up-front cost of energy improvements on commercial and residential properties, such as heating and cooling systems, solar panels or dual-pane windows. Property owners pay back those loans through a line item on the homeowners’ property tax bill.
While fossil fuels still dominate energy production overall in the U.S., solar and wind production are on a growth trajectory. According to the U.S. Energy Information Administration, the country set a renewable energy milestone in March of 2017. For the first time, wind and solar accounted for 10 percent of all electricity generation, with wind comprising 8 percent and solar coming in at 2 percent. The private sector is increasingly driving a global push for renewables as solar and wind become increasingly competitive. Solar panels are becoming cheaper, meaning investor interest may spur continued growth in the future. In combination with the energy of the market, the programs and efforts described above will continue to make inroads in the consumer marketplace, making solar a viable alternative for homeowners and businesses who choose to invest in these systems.
Tune in later this week for part four of this series, where Mark Lesswing will be looking into Tesla’s innovations into the solar roofing space.
This is the second post in a series about rooftop solar technology (view the first post here). The first post reviewed roofing costs because they affect the overall solar cost of a home. In 2016, Fortune recognized the trend towards less expensive solar power installations that could drop another 60% in cost from where they are today. Fortune points out that up until the 1990’s much of the cost reductions were due to technology and manufacturing improvements. They believe the future cost drops will be due to non-technical factors such as financing. I believe there are still technology improvements on the way. This post focuses on the variety of panels that are available for installation and the technology they contain.
It is amazing to look back and see how far the solar panel technology has progressed since Edmond Becquerel first observed the ability of light to generate electricity in 1839. Many in our industry worry about what disruptive developments will come from “kids in their garages”, so it is important to remember that Becqueral was only 19 at the time and he was working in his father’s laboratory. I can imagine that laboratories in 1839 are similar to basements, garages or other workspaces today.
Solar cells took over 110 years to become practical and we have Calvin Fuller and Gerald Pearson from Bell Laboratories to thank for their modern form. They were working on the Bell Solar Battery and in 1954 had created a working prototype. Within four years, solar batteries were powering The Navy’s Vanguard space satellite. These cells had an efficiency of around 14%. No meaningful improvement was made in efficiency until the appearance of thin film technology in the 1990’s. The next big jump occurred over the last three years as manufacturing and design improvements pushed efficiency over 20%.
Solar cells are commonly classified by generations:
• First Generation (or Wafer) – Wafer solar cells are created with crystalline silicon (c-Si). They are efficient, but expensive to produce and contain toxic metals like cadmium and lead. Wafer panels are easy to find but are not eco-friendly and easily identified because of their hexagonal shape.
• Second Generation (or Thin Film)– Thin film amorphous silicon (a-Si) is cheaper and cleaner to produce but is less efficient than first generation wafers. Thin film first made its consumer appearance in the 1970’s as the power source for pocket calculators.
• Third Generation (or Organic) – Organic solar cells are still not practical because of their low efficiency. They are cheap to produce but only have 1/3 of the efficiency of Wafer
An exciting development in thin film panels was achieved by Panasonic’s SANYO brand in the 1990’s. They are now producing thin film solar cells with nearly 20% efficiency (in the real world not the lab). Their technology is a real tongue twister, Heterojunction with Intrinsic Thin layer. I prefer the consumer friendly label “HIT”. Panasonic technology is being used in the Tesla Solar Panels scheduled to hit the market in California this year. Tesla will produce the products in both their Fremont, CA and Buffalo, NY plants.
HIT solar panels are examples of thin film technology so a deeper dive is required to understand who why they perform so well. The answer is due to the clever design of the product. They have a sandwiched design that reduces efficiency loss when heated while capturing more sunlight. This approach makes HIT “bifacial” or able to capture direct and reflected sunlight. This approach increases efficiency in the range of 2-3%.
Tesla’s solar roof is not the only product using of bifacial cells; they have been used for some time in space and in multi-positional configurations. A multi-positional configuration could be used to expose two sides of an array at different times of the day. When used in a vertical arrangement, instead of maximizing generation at high noon, two small peaks can be created; one in the morning and one in the afternoon. If the sum is at a low angle, it is possible to increase the angle of a horizontal panel to capture the reflection off of a light colored roof.
The energysage website provides a comparison of solar cell manufacturers. Their Economy, Standard and Premium categories do not match up with the solar cell generations above because energysage is a consumer-friendly guide not a science website. Also on the energysage website, you will find a regional cost comparison information. All of their information is presented using easy to understand graphics.
The next post will address the regulatory and legislative issues technologies associated with solar energy collection. Can government keep up the changes in the technology? Up until now, the answer has been a resounding “Yes”.
Following up on last week’s CES 2017 Trends Roundup, we wanted to share five products that we saw that we are really excited to watch in 2017!
||Occly is a wearable personal safety device specifically designed to be a visual deterrent. It can be worn on the body or clipped to an accessory. Occly is armed with a panic button, four cameras that provide nearly 360 degrees of coverage, sirens, a microphone, LED lighting, wireless capabilities, and a number of automatic alarm sensors.|
||The NVIDIA Shield is a media streaming device, similar to an Apple TV or Chromecast that allows gaming, apps, and home control in one. It also touts support for Google Home.
||FLOW is a smart, connected mobile accessory to track, monitor and reduce your exposure to air pollution – indoors, outdoors and on the go.
||SPARROW is a wearable environmental health and safety monitor that measures Carbon Monoxide (CO), along with temperature, pressure and relative humidity. It can be attached to your smartphone case, clothes, bag, purse, stroller, bike, and even placed in your car.
||Solpad’s have redesigned the solar panel, integrating batteries into the panel itself, and added software and hardware to integrate it with smart homes and a mobile app. Integrating the batteries into the panels could potentially cut installation costs in half.