Dropping Prices and Improved Technology Mean a Bright Outlook for Solar Power in the U.S

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The United States may be the world’s biggest energy consumer, but we have a lot to learn from Western Europe when it comes to renewable energy.

U.S. solar capacity has more than quadrupled since 2010, according to the U.S. Energy Information Administration, but we are still lagging behind countries in Western Europe, which are making much better use of solar technologies.

Solar power could become the leading global energy source by 2050, according to a recent report by the International Energy Association (IEA).

“We don’t have to wait 35 years,” said Pael Molchanov, solar analyst at Raymond James Financial. “Look at Europe — Germany and Italy. Last year [solar] was almost 10% of total power generation. In the United States, we are not even at 1%.”

However, standing back and letting Europe take the reins of solar growth and development will allow the U.S. to benefit from their hard work.

“There’s enormous scope for solar growth in the U.S., and enormous technology improvements to be implemented,” said Geoffrey Styles, managing director at energy consulting firm GSW Strategy. “Europe has driven costs down by investing heavily in solar, and the U.S. stands to benefit a great deal.”

The solar energy movement is not only for individual homeowners, but businesses as well. Many companies are installing solar panels on the roofs of their buildings, or even solar panel structures in their parking lots, to make use of all that space by generating solar power to offset or even eliminate their electric bills.

“One of our customers is Fry’s Food Stores and the solar shade structure we have installed at their Phoenix-based grocery not only provides renewable energy and a predictable price for a high-load user, it provides shaded places to park, walk, and corral grocery carts,” said Jay Thorne of Strategic Solar Energy. “Fry’s has generated more traffic in its store because of the solar panels in its parking lot and it can also use the columns of the structure for signs and advertising. The value proposition pays off in multiples.”

Keeping Costs Down

The biggest obstacle facing the success of the solar movement is the cost. While the solar energy produced has a definite effect on energy bills, it is the upfront cost that many find troubling or completely insurmountable.

Some companies have found a way around these cost barriers. Elon Musk’s SolarCity pioneered the solar lease, a model in which homeowners don’t own the panels, but they do get to use the electricity produced by them without putting much money down.

The other good news is that the price of solar panels has come down significantly. This price drop, combined with the development of new methods of piecing together and selling those panels, has lead to rapid growth in solar power in the U.S. in recent years.

On a wholesale level, we’ve seen the construction of giant solar farms in the Southwest, some with the capacity of up to 250 megawatts or more. These solar farms are the first of their kind built in the world. Initially these farms were created with only government backing, but are now attracting private capital.

Across the Nation

While the western United States has been most focused on utilizing solar power, the idea is quickly spreading to other regions across the nation, including the Northeast.

Skidmore College in upstate N.Y. has just completed the construction of its new eight-acre solar farm, which school president Phillip Glotzbach says is the “crown jewel” of the college’s sustainability efforts.

But even since the project began, the economics of such projects had already changed. A report published last month by the Lawrence Berkeley National Laboratory in California says that during the first half of 2014, the installed cost of solar projects of 100 kilowatts or more fell from $4 per watt to $3.50 per watt in a group of states that includes New York, a drop of 12%.

Janet Joseph, vice president for technology and strategic planning at the New York State Energy Research and Development Authority (NYSERDA), said Tuesday that solar costs have been cut in half over the past five years, and they continue to drop each time that the state holds a round of solicitations under NY-Sun, a $1 billion program. The last round included a total of $94 million in state grants supporting $375 million in private funding

“This is creating some healthy competition,” Joseph said. “We are making solar a more sustainable industry in New York state.”

If the rest of the country follows suit, we can join Western Europe in become a more forward-thinking, solar-powered nation.

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