10 Predictions for Rooftop Solar and Storage in 2019



Together with the solar sector chaos of 2018 behind us, lots of us are looking toward more predictable growth from 2019…at least before the Investment Tax Credit goes to zero for home and 10% for commercial on December 31, 2021. Then we’re about the solar coaster, therefore it’s unwise to be educated about a rosy solar future — or the wider market, for that matter. If the two Republicans and Democrats collaborate a bit more on energy policy in Washington, D.C., we’ve got the potential for much more stability in the next several years. Luckily, I was flat-out wrong about my last forecast for 2018: The White House did not convert to coal electricity in 2018. Listed below are my 10 forecasts for 2019.

1. Inflation will reach residential solar installations challenging

The Federal Reserve is attempting to keep a lid on inflation, however, the lid has blown off the bud once it has to do with the solar sector. With the fortunate exception of lower module prices, prices for almost every other part and service are moving up. Tariffs are raising inverter, electronic equipment and mounting-system prices; general inflationary factors are rising labor costs. Necessary new code demands (quick shutdown, battery security measures, Rule 21) add to the complexity and prices of the majority of residential and business installations. Nevertheless, since electrical rates continue to go up with inflation, the internet consumer economics are still advancing in the majority of markets.

2. Great software and communications are the price of entry for future battery and solar systems

Marc Andreessen published his “Why Software Is Eating the World” informative article in The Wall Street Journal in 2011, just as “intelligent ” inverters have been being conceived and battery systems were viable only from the off-grid world. I don’t believe applications will “consume ” battery and solar storage components anytime soon (silicon and lithium aren’t among the tastiest of elements), but it’s obvious to me that practical and reliable customer, host and secretary software/firmware are absolutely required for effective grid integration and customer service. Software is a core competency for each single inverter and storage system business.

3. Supply chain problems with battery storage methods will persist

These problems will continue to irritate customers and EPCs — at least until there are multiple battery and inverter companies whose goods are interchangeable (as solar modules and inverters now are). Tesla and Enphase were advisable to incorporate their batteries inverter in one enclosure. LG Chem and LG Electronics are teaming up for an entire packaged offering, and marketplace leader SolarEdge is forecast to add batteries to its product portfolio now that it has acquired Korean company Kokam.

4. With a recession looming, financing will become even more important

Based on Paul Samuelson, “The stock market has predicted nine of the last five recessions,” therefore the expectation is so high that another recession is in the horizon. If it strikes, financing will be even more crucial to the solar sector. During the last recession a couple years back, the residential solar sector nearly ground to a stop as real estate values collapsed, eliminating using home equity loans for system financing. EPCs that offered to finance solar installations — both for both residential and commercial systems — prospered compared to cash-only providers.

5. U.S. solar manufacturing will continue its downhill slide

U.S. solar manufacturing will continue to decline on a worldwide proportion basis, in spite of illusory tariff advantages. Tariffs were employed to solar cells and modules ostensibly to help U.S. manufacturers. However, because virtually all the components in a solar module has to be erased (everything down from cells to junction boxes), the tariffs on these components put U.S. producers at a much greater disadvantage. Meanwhile, overseas manufacturers continued to scale up their volumes and reduce prices. Kudos go to all those intrepid U.S. module makers that are trying to succeed in the face of hostile economic policies for their small business.

6. PUCs will force utilities' hands when it comes to grid reliability

Public utility incentives will compel incumbent utilities to manage distributed storage and solar — along with brand fresh grid infrastructure — to increase grid reliability.  Whether it’s grid edge technologies, distributed energy sources, or behind-the-meter storage and solar, deployments of the systems without substantial utility investments are great for ratepayers. The dilemma — as always — will be quite compensating customers for using their own resources. Note that these consumer assets aren’t only solar panels and batteries, but also smart inverters that will be remotely manipulated to encourage the grid. Investor-owned utilities may continue to lobby hard to set up their own creation and storage resources, and “rate-base” (basically charge customers for) these fresh investments.

7. Even with headwinds, batteries can last their slow march toward 50% penetration 

Cost-effective and dependable battery storage methods are still in the bleeding-edge stage, therefore it’ll probably be a few more years before they’re connected to 50% of systems (including retrofits and upgrades). The two major advantages of combined solar and storage methods — backup energy and energy expenditure economies — are only partially addressed with the first-generation systems now available on the marketplace. Client backup power needs will be fulfilled more efficiently when solar-plus-storage systems may efficiently incorporate with 200-amp residential service panels. Battery techniques provide more persuasive consumer benefits as peak electrical rates move into the evening and new per-kWh prices are added to electric bills (for example, non-bypassable fees and electricity charge indifference alterations ). Unfortunately, hostile interconnection and incentive policies for battery storage methods often thwart these potential savings.

8. As pilot results roll in, uptake of all VPPs Increase

Digital electricity plants will get traction in the marketplace as pilot applications demonstrate their value in reducing peak usefulness energy costs. VPPs are essentially dispersed networks of solar, batteries and controllable loads (EV chargers, HVAC systems) that may be discharged to support the grid with more electricity (batteries or solar ), or temporarily jelqing to reduce loads (EV chargers, HVAC systems). These VPPs will have the most immediate impact among energy retailers, community-choice aggregation offices and municipal utilities, and because investor-owned utilities maximize their gains by possessing generating and distribution resources.

9. Upgrades and upkeep will emerge as a vital opportunity

Maintenance of present systems — such as cleaning panels, replacing inverters, updating archaic monitoring methods and replacing broken panels — will be a growing part of builders ’ business. Although panels generally can continue for 25+ years, inverters and their communication methods are often great for only 10-15 years. Successful contractors will find that providing these solutions is one of the best strategies to generate referral business.

10. Stubborn soft prices will impede further drops in residential solar Rates

Residential solar prices will bottom out in an average $2.50/watt until permitting, inspection, interconnection, incentive and marketing prices are decreased. Even when solar panels were free, average prices are going to be over $2.00/watt until these soft prices begin to fall. Of course, there will be reduced – and higher-cost systems based on location and equipment, but many contractors operating long-term companies are going to be in the higher end of the scope in their own locale. To make these soft-cost issues worse, contractors installing grid-tied battery storage methods are experiencing allowing, interconnection and incentive delays in excess of 12 months — a reality that’s virtually impossible to describe to customers. Please support the efforts from Solar Energy Industries Association and The Solar Foundation to Decrease these prices with their Solar Automated Permit Processing (SolarAPP) initiative. 

As I wrap these up 2019 comments, I am humbled by Yogi Berra’therefore advice: “It’s tough to make forecasts, particularly about the future. ” NeverthelessI am convinced in two important elements of our business: We are doing the proper thing for the international environment, and the economics of solar-plus-storage remain superior to any other energy supply. I remain optimistic that — regardless of the next plunge from the solar rollercoaster — our business will continue to prosper over the long term.


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