Since the mid-2000s, solar energy has grown into one of the most booming industries in America and around the globe. Even though only 1.5% of U.S. energy comes from solar energy as of 2019, solar energy is predicted to gain enormous market share over the next 10 years.
In order to better understand solar energy prospects in 2020, let’s take a look at solar energy, how it has evolved, and where it is going in the upcoming years. Let’s get started.
Solar Energy Over The Years
To better understand where solar energy is heading, it is important to understand where it came from. In other words, we must look at the history of solar energy to see potential improvements and uses for the future.
Early Uses Of Solar Energy
Even though solar energy may seem like a new and modern idea, humans have been using solar energy for thousands of years. In fact, we have record of humans using sunlight for energy as early as the 7th century B.C.E., when humans used sunlight to light fires with magnifying glasses.
Only four centuries later, people began lighting torches with sunlight and mirrors. From there, humans continued to harness sunlight for energy. By the late 18th century, ships powered their long journeys using solar ovens.
In the 1880s, scientists began to develop solar cells made from selenium. A few decades later in 1954, the first silicon-based photovoltaic (PV) cells were developed at Bell Labs. These cells were turned into solar panels and used on satellites by NASA in the late 50s.
Solar Energy Today
Today, solar energy is more popular than ever and is constantly being developed and enhanced. Most enhancements relate to solar panel efficiency and cost.
1. Solar Panel Efficiency
Manufacturers and scientists work to make solar panels more efficient so that way they can produce the maximum amount of energy. In short, solar panel efficiency is how much electricity a panel can generate from the sun.
In the mid-1900s, most solar panels had low efficiency, which meant that they were more expensive and had less energy output. As a result, scientists worked to make panels more efficient.
From 1957 to 1960 alone, solar efficiency increased from 8% to 14%, and efficiency jumped up to 20% by the mid-80s. Now, panels in 2020 can be as efficient as 33.3%, and they are expected to become even more efficient.
2. Solar Cost
Another important aspect of solar energy today is that it is much more affordable than it has been in the past. A leading contributor to more affordable solar panels is both increased efficiency and solar tax credits.
In 2006, the US government introduced solar tax credits. These credits created a large boom in the solar industry, which at that point was primarily led by China. Now, solar energy and solar panels cost under $3 per watt, in comparison to $300 per watt in 1956.
More so, the cost to use solar to generate electricity dipped for utility companies between 2010 and 2017. In fact, it decreased from $0.28 to $0.06 per kWh. This reduction resulted in a $0.52 to $0.16 per kWh reduction for homeowners as well.
As a result, solar energy is more affordable now than it ever has been before. Although The United States is still behind China in terms of PV installed capacity in megawatts, it is now the number 2 solar power generator because of the increased efficiency and costs.
3. Home Panels Vs. Company Panels
The solar energy boom has caused both homeowners and corporations to purchase and install solar panels. Solar tax credits were specifically put in place to encourage homeowners to invest in panels, despite their somewhat expensive cost for the average homeowner.
At the same time, the Energy Department encourages large corporations to use solar energy through impressive deals. According to the SEIA, Apple is the leading corporate installer for solar energy in 2019. Other top incorporations include Amazon, Target, Walmart, and Google.
Rise Of Solar Companies
As the solar energy industry boomed, many solar companies have risen to power in the United States. Interestingly, these solar companies have even grown to receive funding to finance power plants by the Obama administration.
In short, the industry is broken down into four categories: manufacturers, installers, marketers, and operations/maintenance firms. Together, these categories result in billion-dollar companies related to solar energy. Currently, utility-scale PV and installers are the main drivers for the solar energy industry. Power plants, on the other hand, only make up a fraction of the companies involved with solar energy in America.
Top Solar Companies In The U.S.
Currently, the top solar manufacturer in America by market capitalizations is First Solar (number 10 in the world), while the top solar installer is SunRun, based in San Francisco, California.
Meanwhile, the top solar stock goes to Tesla, which makes electric cars and installs solar panels. Big utility companies such as NextEra Energy and The AES Corp are also popular solar stocks. Other popular solar stocks include Brookfield Renewable Partners, SunPower, and SolarEdge.
Solar Energy Statistics And Trends
Most solar stocks are collected by SEIA and IBISWorld. According to their data, solar industry revenue was $10 billion in 2019, which represents an annual growth rate above 36% over 5 years. To date, 2016 has been the peak year for solar installations, but the U.S. solar market is expected to hit $22.9 billion by 2025.
Solar trends will help us to better estimate the importance, growth, and popularity of solar energy in the future. Here are the most important trends to date:
- Solar credits are vital for the industry because over 90% of Americans want solar, but only half of those people are willing to pay for it.
- The residential solar segment hit in all-time record in 2019 with 71.3 gigawatts of installed capacity. It is expected that homeowners will continue to take advantage of solar tax credits through 2021. If Congress extends the incentive, it is expected that homeowners would take advantage of it.
- Solar installations will increase across all market segments. These installations will increase in 2021 among non-utility businesses and developers who want to take advantage of federal tax credits. Corporations who continue to invest in energy will continue to attract investors.
- Traditional energy companies will diversify to include more renewables, much like European developers.
- Solar battery technology will improve. The current home solar battery capacity, lifespan, and efficiency are expected to increase.
- Demand will increase for a broader range of solar products, including generators, phone chargers, outdoor motion sensor lights, backpacks, and more.
Humans have been harnessing the sunlight as energy for thousands of years, but we have only recently started using the light in the form of solar panels. Since the 1900s, solar energy has developed into one of the most booming industries in America.
As a result, solar energy is expected to boom in 2020, which includes an increase in installations and efficiency, but a decrease in cost. Of course, the exact growth of the solar industry in America largely relies on solar tax credit incentives, which is supposed to end in 2021. If Congress extends the incentive period, solar energy is expected to continue growing past 2021 as well.