Company: Solar Universe
GTM Research and the Solar Energy Industries Association released numbers this morning suggesting that the solar juggernaut is not slowing down. Consider this: in the first three months of the year, the U.S. installed 723 MW, just under half of all new generation capacity installed across the country, and the best first quarter yet for solar.
The utility solar market scored big, with 318 MW installed under the direction and ownership of the electric utilities. However, the residential market saw 164 MW installed, with 53% year-over-year growth.
The biggest development driving this trend is the explosive growth of third-party owned solar, which removes the upfront financing obstacle. Companies such as Solar City have approached this problem head on. In the past two months alone, Solar City announced a $500 mn lease financing agreement with Goldman Sachs, as well as a zero down financing program for homebuilders wishing to include solar in new construction. The GTM/SEIA report notes that these third-party models supported two-thirds or more of all residential solar installation in some states.
As one might expect, the ‘left coast’ had a major role to play, especially in the residential sector. In California, residential installations actually eclipsed non-residential additions, driven largely by the increasingly favorable economics. With the benefit of the 30 percent federal investment tax credit, solar is now cost-effective when compared with relatively high California utility rates.
Expect that trend to continue as solar costs continue to fall. Panel costs will probably continue to decline, but more slowly than in the past. The new frontier for efficiency is in the area of soft costs, which is being attacked by some companies with a vengeance. Better approaches to the market, combined with online tools, are likely to cut into soft costs within the coming year, with the result that total installed costs may fall as much as another 10 percent in the near future. Two companies are emblematic of this new dynamic: EnergySage provides an online platform that lets customers get quotes from numerous vendors within a short timeframe, allowing an apples-to-apples comparison. Solar Universe just rolled out a new online platform with a franchise model, creating the ability to have a conversation with customer about lifestyle, wants, and needs, to generate a proposal in real time, and to flow electrons from a rooftop in 45 days or less (more on that in an upcoming post). With such innovative companies working to bring new tools to the soft side of solar, the industry will continue to mature rapidly and costs will continue to fall.