Top 3 Trends For Solar Energy In 2021


Since the mid-1950s, solar panels and the solar industry have boomed in popularity, causing the solar industry to become a dynamic and cost-efficient market. Many factors, such as government policies, fossil fuel costs, improved solar energy technology, and public awareness about climate change, impact the solar market across the world.

Even though the solar industry has boomed over the last decade, it is important to assess whether or not it will continue to boom in the future. To better understand the solar industry’s effect on our future, let’s look at the three most important trends in solar energy today.

1. Prices Are Falling

Solar energy is an intermittent energy source. Although this may sound confusing, it is not. An intermittent energy source simply means that the solar panels only produce power when the sun is shining. If the sun is not out, the solar panels cannot produce power. Luckily, solar technology has improved drastically so that energy can be saved in a safe and cost-efficient manner.

Cost For Lithium-Ion Battery Storage Is Falling

Since solar panels cannot produce power during the night or cloudy weather, many systems include energy storage functions. These storage systems will allow the energy produced during sunny hours to be used during cloudy weather or the night.

Currently, there are two types of solar batteries: lead-acid batteries and lithium-ion batteries. Lithium-ion batteries are more advanced, have a longer lifespan, and require less maintenance. As a result, this battery type is more popular. Unfortunately, lithium-ion batteries are also more expensive, making them unattainable for certain people.

Luckily, the price of lithium-ion batteries has decreased significantly over the last several years. In fact, the price of lithium-ion battery storage decreased by 76% from 2012 to 2018. It is expected for the price to decrease even more in the upcoming years. This projection is good news since the demand for solar energy storage is expected to increase as well.

Solar Energy Costs Are Becoming More Competitive

Natural gas plants are often used to meet energy loads because they are easier to turn on and off than traditional power plants. Since natural gas plants are more popular and cost-efficient, they make intermittent renewable sources, such as solar energy, a cost-competitive option. In other words, the increased use of natural gas plants allows solar energy to compete in the energy market.

More so, utility-scale battery banks are decreasing in price, making solar energy plus storage more competitive on price alone. These battery banks make it wholly unnecessary to fire up power plants during peak times. As a result, fossil fuel consumption is reduced as well as cost. These facts make solar energy look more attractive and financially viable than other power plants in the future.

Similarly, residential homes rely on solar systems with battery storage for emergency power during grid shortages. This makes solar energy a viable option for people who live in areas prone to power outages due to natural disasters or faulty utility infrastructure, like Puerto Rico.

2. Electric Vehicles Boost Electricity Demand

By 2025, electric vehicle sales are expected to reach 97 million vehicles, in comparison to the estimated 11 million units in 2021. All of these vehicles are expected to require electricity for power.

According to the national renewable energy labs, the increased demand for electric vehicles can cause a 38% increase in the US electricity demand. A demand increase of this amount will create a shift in the energy market, which will boost the demand for new power or electric generation. Renewable energy sources such as solar energy will be needed to reach the demand.

More so, because most electric vehicle owners are eco-minded, they are also installing solar systems for charging their cars. This fact is accounted for in the increase in electricity demand. Installing solar systems to power their car will then make their car run off 100% renewable energy. Solar installation companies are finding electric vehicle chargers to be a popular trend at the moment.

3. Federal Solar Tax Credit Decreases

Unfortunately, not all trends are optimistic. One negative trend for the upcoming years is that the federal solar tax credit is to decrease.

Currently, the solar investment tax credit is a very valuable and efficient incentive for individuals and companies to install solar systems. How it works is that as you install a solar system, the federal government gives you a tax credit that reduces the total cost. It is more valuable than a taxpayer write-off.

Unfortunately, the solar credit was not extended by Congress, which means that the credit will decrease every year starting in 2021. So, the incentive will be greater in 2021 than it is in the upcoming years.

In 2019, the credit was set at 30%. In 2021, however, the solar investment tax credit decreased to 26% of the system cost including installation. In other words, a $10,000 solar system will only receive a $2600 tax credit in 2021. By 2021, the solar tax credit will decrease to 22%, until the tax credit is decreased to 10% for commercial and utility solar projects and 0% for residential solar systems.

This trend will have negative impacts on the solar industry at least initially. The reason for this is that many residential homes take advantage of the tax credits in order to make installing a solar system more affordable.


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