10 Predictions for Rooftop Solar in 2017
I got lucky with my predictions for rooftop solar in 2016 — pretty much on target with nine out of the 10 darts that I threw. But this year is shaping up to be much more challenging, with routine solar-coaster turmoil combined with political uncertainty. Looking forward to 2017, my list no longer includes the benefits of the Clean Power Plan and 500 million solar panels (along with the EPA and half the equity in the remaining solar module companies). Nevertheless, I remain very optimistic about the future of clean technology industries simply because their economic benefits have been proven. So here are my 10 predictions for rooftop solar in 2017.
1. Module prices will stay at current low levels, roughly 35 cents for megawatt orders, roughly 45 cents for container quantities and roughly 55 cents for small orders. Manufacturers prefer to operate their production lines at full capacity (and full employment), even if they are selling at breakeven or less. As the year progresses, these low prices will apply to higher and higher efficiency modules. Differentiated modules — those with integrated electronics, simplified installation technology or 20+ percent efficiency — will command higher price points and margins simply because they provide more value to installers and homeowners.
2. U.S. solar manufacturing will continue to decline. Sadly, the module supply chain is almost entirely from Asia: wafers, cells, backsheets, EVA, junction boxes, glass and aluminum frames are all cheaper in China with comparable quality. Political rhetoric will not bring manufacturing back without a good plan to address the supply of key components in the U.S. Ironically, tariffs have made things much worse for U.S. manufacturers — removing tariffs on cells and extruded aluminum for solar would go a long way toward improving the economics for the remaining U.S. module manufacturers.
3. Community solar will struggle to get traction. Customers want both clean and cheap solar power. But when community solar is developed by utilities, they charge a premium for solar, so customers don’t buy. When lower per kilowatt-hour cost community solar projects are developed independently, utilities act to delay projects or increase costs in order to protect their monopoly. More local governments will step in with community-choice Aggregation programs. These CCA programs break the utility electricity sales monopoly, providing clean and cheap power to customers. Read more…