The solar industry is one of the fastest-growing industries in America to date. Not only has it boomed in popularity dramatically over the last 20 years, but it is expected to increase in popularity and demand over the upcoming years as well.
To see the full trajectory of solar energy in 2020, let’s look at the U.S. solar industry today, how it compares to other solar industries around the globe, and what challenges it faces. Let’s get started.
U.S. Solar Industry Today
The U.S. solar industry is a leading industry with high economic value. Currently, the industry employs around 242,000 people, as well as generates billions of dollars in economic value. By September 2019, the U.S. deployed more than two million solar systems, which had 71,300 MW of solar capacity and generated over 100 TWh of electricity.
These factors show that the solar industry is a leading player in our economics, and it is predicted that we haven’t seen the biggest increase yet since solar PV is estimated to grow the fastest by 2050.
Currently, California leads the nation with the most solar PV capacity. It has over 26,000 MW installed, which is nearly five times the amount of the second leading state, North Carolina. California’s leading slot is largely due to the state’s proactive stance on solar energy and increased exposure to the sun.
By 2025, California, Texas, Florida, Nevada, and North Carolina are expected to deploy about half of all solar PV capacity in America. California and Texas alone are expected to account for nearly 1/3 of the U.S. capacity.
As for solar manufacturing, Ohio, Georgia, and New York are the leading manufacturers for solar panels. These three states account for almost 60% of all U.S. manufacturing capability.
In the upcoming years, solar energy is expected to increase astronomically. In fact, the total installed PV capacity is estimated to more than double over the next five years. For this reason, the U.S. Bureau of Labor statistics even estimates that solar PV installation will be the fastest-growing job between 2018 and 2028.
Solar Energy Storage
Additionally, pairing solar systems with solar storage is expected to increase in popularity. As solar storage increases so do the impact of the solar panels.
Certain states, such as California, can produce so much solar energy relative to electric demand that the wholesale electricity prices can go negative. After the prices go negative, the price for electricity will increase as solar lowers its input, such as when the sun starts to go down.
It is important to find a way to save energy for later so that people can use electricity created during the daytime when they get home in the evening. The storage will counter the increase in prices as the sun goes down.
Unfortunately, the prize for storing bulk amounts of energy is too expensive for most people. There are currently some projects underway to help counter the price. As prices come down for solar energy, it is more likely that storage systems will become more popular, such as in the 690 MW solar and storage Gemini Project in Nevada.
How U.S. Solar Compares To Global Solar
At the end of 2018, the U.S. ranked second in terms of solar PV deployments, with only China ranking ahead. By 2019, it is estimated that global PV growth is to exceed 100 GW/yr. More so, the growth is expected to triple by 2050, and the U.S. and North America are expected to be responsible for 20% of the total. Still, the U.S. has a long way to go to catch up with China’s production in capacity.
Challenges That Face The Solar Industry
Even though the U.S. solar industry is booming, it faces several challenges as well.
Notably, the Trump administration has placed important tariffs on solar panels. It is estimated that the tariffs have cost 62,000 jobs and lost nearly $20 billion in private investment. More so, these tariffs negatively and disproportionately impact areas less exposed to sunlight and raise the levelized cost of electricity.
Another challenge facing the solar industry is the tight job market. The tight job market is making it harder for the solar industry to grow and retain qualified workers, just as it is any other market. In fact, a survey found that about 1/4 of solar firms found it very difficult to find qualified applicants.
The third challenge facing the solar industry is the investment tax credit period. 2019 was the last year for the full 30% investment tax credit. As of January 1, 2020, the investment tax credit is down 26%. By 202, it will fall to 22%, and in 2022, it will fall even further to 10% for utility and commercial projects and 0% for residential projects.
More so, emissions are another challenge for the solar industry. Solar panels themselves don’t produce emissions, but emissions are released when manufacturing the panels. Although the emissions are much lower than manufacturing other products, this is a challenge for the solar industry since it is aiming to remove as many emissions as possible.
Finally, the last challenge faced by the solar industry is that a rapid increase for solar deployment will be followed by a rapid increase in the need for end of life solutions in 25 to 30 years. In other words, we will need to know what to do with solar panels once they stop working. It is unclear if recycling or second life uses is the answer.
The prospects for the solar industry are looking very good for the future. It is expected that the U.S. will continue to boost its capacity and gain more money from the solar industry. With that being said, the U.S. solar industry is still behind China and faces a lot of challenges in the years to come. Nevertheless, the solar industry is expected to expand significantly as costs decline and demand increases.