In taking a look around your neighborhood, you’re likely to notice that solar panels are cropping up all over the place. Why is that, exactly? One of the primary reasons that we feel that the solar industry has enjoyed such success (so far) and will continue to grow and thrive has to do with the fact that, other than wind, it’s truly one of the only natural energy sources which is not only extremely reliable, but also consistently and fundamentally able to lower energy costs. Solar energy is performing its job so well, in fact, that fossil fuels should actually be shaking in their boots. After all, these highly expensive (not to mention non-renewable) resources don’t seem to have nearly as much to offer.
Although the world has primarily relied on fossil fuels like coal, natural gas, and oil to take care of its ever-growing energy demands, these types of resources are plagued with problems. The main issue with fossil fuels is that they are becoming more and more expensive — from the ground up. The processes associated with extracting these resources from the ground are growing costlier, and it’s only going to get worse. Other options like nuclear power continue to come in at higher costs than anyone ever expected, which makes it virtually noncompetitive with natural, renewable energy sources, and solar is coming out as the clear victor.
The Competitive Costs of Solar
Despite the fact that most of us have a sincere desire to do what’s right for the planet by making use of renewable energy resources like the sun and wind, the fact stands that this is really only doable when the price is right. We all have energy needs and they must be accommodated in a way this is reasonable and affordable. What’s remarkable is that solar costs are becoming more competitive with every passing day. A report released by the Solar Energy Industries Association paired with GTM Research was completed earlier this year and showed proof that residential solar systems are 9.7% less expensive than they were only a year ago, with commercial system costs seeing an incredible drop of 13.1%. Even fixed tilt utility project expenses have gone down by 7.6%. With numbers like these, businesses nor consumers can afford to not take solar seriously as a viable money-saving solution to your energy needs.
The rapid pace of these cost reductions is even more amazing when you consider the fact that solar is currently competitive with the grid in all three segments. Solar providers have the ability to vend residential system leases and power purchase agreements for less than the standard expense of electricity to a home, and this includes the very small solar projects. Larger solar projects such as sizable businesses, on the other hand, are being won over based upon the cost of the electricity being sold by providers as opposed to the mandates that were previously responsible for driving solar installations. More and more, businesses of all sizes, in addition to consumers, are realizing the value of solar power of their own accord.
Looking Ahead
Yes, the progress that has been made in this sector is highly impressive, but there’s still a lot of work to be done within the industry in terms of cost reductions if solar energy hopes to remain competitive throughout the next decade. Incentive programs and subsidies that have been encouraging home and business owners to make the switch will be decreasing in value. This means that in order to maintain value and avoid a drop in sales and installations, the industry will need to cut costs by about 20%. Given the trajectory, though, this looks quite feasible, even if it may create a challenging couple of years.
In fact, the future is looking bright for solar indeed. If costs continue to come down over the long run, the industry will stay ahead of competing energy sources more and more. Interested in learning more about renewable solar energy? Reach out to the NuEnergen experts for valuable information and insights.
