Although once considered an inefficient and costly method of electricity generation, solar power now contributes to the fastest growing source of energy: renewables. Since 2010, the average cost of solar energy has declined by around 70%, and since the 1980s, solar power saw a reduction in costs of 97%. This sharp decrease has largely been driven by photovoltaic (PV) module efficiencies and hardware and inverter costs.
Evidence of these falling prices can be seen in the rapid adoption of solar energy as an electricity source. According to the Solar Energy Industries Association (SEIA), a non-profit, national trade association for the solar and solar storage industries, solar energy has experienced an average annual growth rate of 24% over the last decade. Perpetuating and increasing this growth in the future are federal policies such as the Inflation Reduction Act. Over the next 10 years, the IRA is forecasting a 48% increase in solar deployment, resulting in an additional 160 gigawatts of solar than could be achieved in its absence. . Due to the Inflation Reduction Act’s key tax incentives and increasing technological efficiencies, the solar industry is expected to nearly triple in cumulative deployment by 2028 (SEIA).
Beyond economic drivers, technological advances in solar have led to its increased adoption. Traditionally, the U.S. electricity grid was designed to generate electricity and almost immediately deliver it to customers (very little is stored). Including storage technologies in infrastructure already established without it can be a challenge. Because of this limitation, pairing solar with battery storage is a relatively new technology, but its growth is expected to be significant. Already, energy storage technology is in use in the U.S. grid in the form of pumped hydroelectric storage, batteries, compressed air, and flywheels. By 2027, nearly 30% of all new solar systems will be paired with storage. Solar-plus-storage systems provide an increased level of energy security to those relying on solar for power. With a storage system, power will be available regardless of the time of day without having to rely on backup power from the grid. Storage systems allow for further pocketbook protection and benefits , as the homeowner can determine whether to use their stored electricity, or sell it back to the grid depending on utility rates.
Traditional benefits of solar power include reduced greenhouse gas emissions and reduced utility bills. Besides decreased costs for those directly using the power source, solar energy also brings down the overall price of electricity. According to a study conducted by Professor Kaufmann in 2016 on the effects of increased photovoltaic (PV) utilization in Massachusetts, increases in PV will ultimately reduce electricity prices by $0.26-1.86 per megawatt hour (MWh). This price reduction ultimately saved Massachusetts rate-paters $184 million in 2010-2012. Other economic advantages of solar include its prowess as an “economic engine.” As of 2022, more than 263,000 Americans work in solar at more than 10,000 companies, an industry which generated nearly $35 billion in private investment.
Clearly, solar is greatly benefiting Americans by reducing electricity prices and increasing economic revenue. However, the management of this technology leaves much to be desired. Volatility in the solar industry puts pressure on businesses, and can lead to bankruptcy for many companies. Homeowners whose solar installer has gone out of business can face many challenges in receiving the maintenance and repair they need to keep their panels running. In California, high-profile bankruptcies have left many customers with unfinished systems, or with panels that are not producing any power. In one particular case, a customer invested $70,000 in panels on her roof that didn’t work. To add to the frustration, it is often not possible to contract other solar companies to finish these jobs due to the reluctance of companies to touch equipment that isn’t theirs.
Another situation in which homeowners face risks is when buying homes with leased solar systems. In an article written by Alana Semuels featured in Time Magazine, she shares her experience of taking over a solar panel lease in order to buy her house. After months of lease payments, Semuels discovered that her solar panels were doing absolutely nothing. Her contractor claimed they previously disconnected the system, yet they did not explain why they kept accepting payments.
Semuels is not alone in her situation, when solar was more expensive, and before the IRA was passed, many consumers entered into leases with solar companies to offset upfront costs. However, when these companies went bankrupt, these leases were sold to private companies and other investors with no incentive to maintain quality service. People who did the environmentally friendly, and arguably the “right” thing in the early 2010s by seeking out solar power when costs were higher, are now being punished with leases to sometimes inefficient, or broken systems. In some cases, it is not even possible for customers to simply stop paying these companies as most solar leases have a clause limiting the amount of relief consumers can receive.
Solar energy plays a key role in transitioning our energy system away from fossil fuels to a more sustainable and equitable system. However, despite its many benefits, the solar industry has a dark component in leasing that cannot be ignored. With its projected growth, it is important to increase regulation and awareness on the actions of solar companies to ensure that consumers are not left vulnerable. It may be difficult for environmentalists to criticize solar companies, as they play an important role in reducing the effects of climate change. However, like any company, it is important to hold them accountable and ensure that they are providing a quality service to its customers.
Almerini, Ana. “What Happens When Your Solar Panel Company Goes out of Business?” Solar Reviews, 23 Aug. 2023, www.solarreviews.com/blog/solar-panel-company-out-of-business.
“Documenting a Decade of Cost Declines for PV Systems.” National Renewable Energy Laboratory, 10 Feb. 2021, www.nrel.gov/news/program/2021/documenting-a-decade-of-cost-declines-for-pv-systems.html#:~:text=The%20cost%20of%20solar%20continues,lowered%20hardware%20and%20inverter%20costs.
“Has Solar Panel Efficiency & Cost Changed Over Time?” Boston Solar , 13 Jan. 2020, www.bostonsolar.us/solar-blog-resource-center/blog/has-solar-panel-efficiency-cost-changed-over-time/#:~:text=Solar%20Panel%20Prices%20Are%20Dropping,97%25%20reduction%20in%20module%20costs.
“Impact of the Inflation Reduction Act.” Solar Energy Industries Association, Oct. 2023, www.seia.org/solar-industry-research-data.
Kaufmann, Robert and Vaid, Devina. “Lower electricity prices and greenhouse gas emissions due to rooftop solar: Empirical results for Massachusetts.” Energy Policy, vol. 93, 2016, pp. 345–352, https://doi.org/10.1016/j.enpol.2016.03.006.
Lazar, Kristine. “Solar Industry Facing Bankruptcies, Leaving Many with Roof Panels That Don’t Work.” CBS Los Angeles, 14 June 2023, www.cbsnews.com/losangeles/news/solar-industry-facing-bankruptcies-leaving-many-with-roof-panels-that-dont-work/.
Semuels, Alana. “Rooftop Solar Power Has a Dark Side.” TIME, 26 Sept. 2023, https://time.com/6317339/rooftop-solar-power-failure/.
“Solar Integration: Solar Energy and Storage Basics.” U.S. Solar Energy Technologies Office. https://www.energy.gov/eere/solar/solar-integration-solar-energy-and-storage-basics
“Solar Industry Research Data.” Solar Energy Industries Association, Oct. 2023, www.seia.org/solar-industry-research-data. “Utility-Scale Energy Storage: Technologies and Challenges for an Evolving Grid.” U.S. Government Accountability Office, 30 Mar, 2023. https://www.gao.gov/products/gao-23-105583