Now that final numbers for 2020 are entering the record books, few industries can look back at this rocky year with a smile like solar can. Big solar stayed big this year despite a global pandemic, high construction costs, and a tariff on imports.
Utility-scale solar powerplants grew in many regions, most notably the Southeast and Texas. By July 2020, the U.S. had installed nearly 6 gigawatts of big-scale solar, 4 GW more than it had by July 2019, according to business analytics firm IHS Markit.
"If there’s one solar segment that can weather a pandemic, it’s utility-scale photovoltaics," writes PV magazine. "Supply chains suffered some delays in the early days of the pandemic, but they’ve recovered and are now in full swing. It’s easier to socially distance on a 1,000-acre solar project than on a residential rooftop, and solar EPC firms like Rosendin and Swinerton are growing their renewables businesses as fast as they ever have."
In 2020, Moving Online Helped Residential Solar
Residential solar providers faced three weighty challenges this year that could have reduced the attraction of going solar for homeowners. First, they had to counteract a 20% penalty on panels and other imported equipment due to the tariff that Trump imposed on about half of China’s exports to the U.S. Second, the Covid-19 crisis made homeowners reluctant to welcome consultants to their home or attend meetings about financing and installation options. Lastly, record unemployment and overall job uncertainty made people cautious about up-front costs, even while the ongoing monthly savings from solar increased in appeal.
How to lower costs and entice customers to explore their options when people don't want to leave their house? Move online. Residential solar providers showed flexibility and forward thinking in 2020 by virtualizing much of the interaction between reps and customers. Video walkthroughs, web conferences, ready-fast online simulations of the installation process, and other digital sales practices helped the industry not only stay afloat but thrive in a tumultuous time.
“We’re seeing a lot of success in the conversion to digital sales,” said Sunrun CEO Lynn Jurich in a quarterly earnings call, as reported by PV magazine. “We’ve taken how the industry would have evolved—probably in two years—and we’ve done it in a month. I’m very encouraged by this transition and what it can mean for acquisition costs.”
In 2020, the Big Opportunities Were in Texas
Abundant sunshine, lots of land, loose regulations, and an open energy market set the stage in Texas for big energy projects. As of 2020 there are 13 big solar facilities in Texas that can produce 100 megawatts of power, according to the Solar Energy Industries Association (SEIA).
The association calculates that the cost of developing solar farms has dropped 40% in Texas in the past five years. Once a farm is built, it is cheaper to operate than gas and coal plants because the fuel is free. Also driving solar installations in the Lone Star State is a streamlined permitting and interconnection process.
Although the state has no renewable energy mandates (i.e., targets for how much energy in the state has to come from renewable sources by a certain year), two large utility companies there have their own mandates.
Texas produces far more carbon dioxide than any other state, more than 700 million metric tons a year.
2020 Is the Year We Reached Grid Parity
Jeffrey Sachs, a professor at Columbia University, has watched utility-scale energy projects evolve over the years. "Renewable energy now is at what is called grid parity," he told CBS News. "That means it is no more expensive to put up a solar field than it is to put up a coal plant."
What does the new year have in store? First, solar industry advocates have already appealed to President-elect Joe Biden to lift the 20% tariff on imports. Next, with vaccine programs now under way, 2021 should be the year our lives get back to normal (remember normal?) and people get their jobs back, and homeowners and solar reps can meet in person once again. More companies will undertake robust plans to reach carbon neutrality like Microsoft, Google, and Apple already have. We'll watch with interest as the new year starts for solar.