Despite the anticipated pushback against environmental policies by incoming President Trump and his fossil fuel friendly cabinet picks in 2017, a glance at this past year’s renewable industry trends and plummeting panel prices suggest that right now might be the cheapest time ever to switch to solar before policy changes and a slowdown in manufacturing drive costs back up.
- Last year(s) for the Full Extended Solar Investment Tax Credit
The Solar Investment Tax Credit (ITC) is one of the corner stone pieces of nation wide legislation supporting the development of solar in the United States. In a nutshell, the ITC is a 30 percent tax credit for solar systems on residential and commercial properties. It was set to expire this year, but a rare act of bipartisan policy making extended it to 2023. The tax credit incentive will decline by a set percentage every year until its extended expiration date, with 2017 being the last year people can receive the full 30 percent write off. But let’s not be optimistic for a minute and assume the incoming Trump administration were to try and abolish this credit. There’s a dull silver lining in the fact that our government is a large machine that takes some time to change course, meaning that any potential changes might not take effect until a year or two down the line.
- A Sudden Plunge in Hardware Costs
We’ve all heard the investment maxim “buy low sell high”–well, when it comes to the hardware costs of solar, it’s possible things are as low as they’re likely to get. At the end of 2016, Dec 28 saw the market price of solar panels fall by an additional 2.4% to $0.36 a watt according to PVinsights
The plunge was due to an over manufacturing of panels and a lower than expected surge in demand. To move inventory, many manufacturer’s such a China’s Trina Solar Ltd. are most likely selling at a loss.
- The Fossil Fuel Industry is Fighting Back
2016 was a record year for solar. Domestically, utility-scale solar additions totalled 9.5 GW according to the US Energy Information Association, more than any single energy source–even fossil fuels!
Globally, renewables fared even better, with the cost of solar and wind the same price or cheaper than new fossil fuel capacity in more than 30 countries according to a World Economic Forum report in Dec 2016. The report points out that as prices continue to fall two-thirds of all nations will reach a point know as “grid parity” even without subsidies.
“Renewable energy has reached a tipping point,” Michael Drexler, who leads infrastructure and development investing at the WEF, said in a statement. “It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”
While the landmark is cause for brief celebration by environmental enthusiasts, it has also caused panic throughout the fossil fuel industry spurring more push back than ever to slow the trend. The American public can expect little to no help from the incoming Trump administration in the federal government, and will instead need to rely on their state government to help or hinder the future of solar growth. Different state’s net-metering policies have experienced push back from utility companies seeking to decrease paid incentives to residents switching to solar. While technology follows the trend of getting cheaper and better, biased legislative policies against consumers and in favor of the well financed utility companies can counteract such movements. Again, the silver lining for 2017 is hinged on how slow the branches of government move and how vocal the constituents are.
Without a doubt, solar has gained enough momentum to eventually become the energy choice for the world, but how fast that might happen is unknown.
With a Trump presidency it’s possible the growth of the solar industry in America might come to a stall for the next several years, marking 2017 one of the last windows of opportunity to lock in the lowest prices the market has ever seen.
To learn if your house is in a favorable area for state incentives and solar power generation contact GoGreenSolar.com or call (888) 338-0183 for a free consultation.