A New Record for Solar Panel Sales in the U.S.

In the U.S. the amount of solar panel sales just smashed another record as far more American homes than before are now investing in solar power. It is something you should consider for your business office as well, in order to lower electricity bills.

In the second quarter of the current year, the solar panel installation market set another record, which indicates a large shift in the industry towards consumers, and in particular homeowners.

In a report by GTM Research together with the Solar Energy Industry Association trade group, this new record saw even more solar panel sales than the previous quarter of the year, and that too was a new record at the time.

For the most part, at least until fairly recently, almost all solar panel installations in the U.S. have been made on large solar farms in highly remote areas, which then generated electrical power and was sold on by the utility companies. The electricity is distributed to the consumer by way of a centralized power grid.

Of course, this solar market, which is known as a utility-scale solar market, is vastly larger than those for homes. Currently, there is some 729 megawatts of solar panels that are installed by utilities in solar farms.

This compares to 473 megawatts of solar panels that are installed on the roofs of homes. To get some idea about the amount of power generation this is, a thousand megawatts represents the production of a natural gas large coal plant.

Nevertheless, the quantity of residential solar panels in the U.S. has been consistently growing, and at a rapid pace. It is expanding across many states, rather than focusing on merely a handful that are fortunate enough to enjoy plenty of sunshine.

For the most recent quarter, the number of home solar roofs increased by 70 percent year-on-year. This growth now witnesses some ten states enjoying a vibrant solar market in comparison to just four states back in 2013. Among the leaders of those is L.A., as the number of solar panels in Los Angeles homes continues to soar.

The market growth for residential solar makes a very interesting leap forward given that with the installation of solar panels on individual roofs, the consumer has more control over the generation of their own electrical supply. In effect, the supply is becoming decentralized, which greatly contrasts to the traditional method of centralization. In the centralized model, it is the utility company that remains the grid’s backbone.

Further, there is a current growth in the utility-scale market for solar. However, for the largest solar farms, potentially there could be a boom and bust cycle occurring.

Solar farm owners get a 30 percent tax credit in subsidies which is known as the federal Investment Tax Credit. From 2017 onwards, the amount of credit may drop to as low as 10 percent.

It’s because of this that we’ve seen many power companies just this year rushing to create new solar farm utilities. This in turn has led to an over-inflated market but in future, it may also lead to an under-inflated market.

This tax credit, which was implemented in 2006, was only set in place to allow the solar industry the ability to compete against the other power sources such as natural gas and coal, which at that time were cheaper. As solar power becomes ever more affordable, the tax credit inevitably will be lowered or even scrapped altogether as it was never meant to be implemented on a permanent basis.

A further report that was released by IHS at the beginning of this year, stated that the total amount of solar farms in the U.S. which were planned to be built by the end of 2016 amounted to 32 gigawatts, each farm being between 20 and 100 megawatts in terms of generation capacity.

Thus, there may be an extension to the federal tax credit, and there’s even more chance of this should a solar-friendly president be elected, such as Hillary Clinton. Nevertheless, the uncertainty of the future is still having a large impact on the U.S. solar industry.

Overall, the expansion in the residential solar markets and the utility-scale solar markets in the U.S. just this year alone has been no less than impressive. At this time, there are some 20 gigawatts of solar power in operation around the nation. This is enough to provide power for 4.6 million homes in the U.S.

In the current year, 2015, from all of the newly introduced electricity-generating capabilities, 40 percent of it has come from solar power.