Solar Outlook for 2013

Tuesday, January 22, 2013

At the outset of this new year, we’d like to take a look at the state of solar energy and what lies in store for 2013. Two recent articles in The Economist look at the changing nature of the ‘alternative energy’ paradigm and whether or not energy independence is coming closer for the United States.

It seems clear that as a nation, we have turned a significant corner in the shift towards more renewable forms of energy. So much so, that Geoffrey Carr, science editor at The Economist, argues for a re-branding of the industry. The forms of energy that were once considered ‘alternative’ are finally becoming ubiquitous enough to make the term no longer applicable. Perhaps it’s time instead to focus on the concept of ‘renewable energy’ as the defining term for a burgeoning industry that has seen exponential growth in the past decade.

At the recent International Renewable Energy Conference 2013 (ADIREC) in Abu Dhabi, organizers of the event agreed that the job creation and health benefits of the renewable energy sector will naturally push is growth despite lack of any worldwide binding agreement.

Similarly optimistic, Geoffrey Carr cites some promising trends for the future of renewables:

• Wind power now accounts for 2% of world electricity, with capacity doubling every two years.
• Solar power grew 86% last year, and the size—and cost—of solar transistors continues to fall by 50% about every 18 months.
• In the U.S., coal-fired power plants cost about $3 per watt to build, while natural gas plants cost about $1 per watt. Even so, those numbers don’t include operating costs and the fuel needed to run the plant—the final numbers are much higher. Solar costs about $1 per watt for the solar technology, plus $4 per watt in construction costs, but these costs will go down as contractors become more efficient, and, once built, the sun’s fuel’ is free.
• The problem of reliability—when the sun doesn’t shine or the wind doesn’t blow—is an area of focused research. Development of flow batteries is likely to accelerate in 2013 along with ‘grid scale’ storage technologies enabling better storage of renewable energy for backup.

At the same time, Simon Wright, energy correspondent at The Economist, believes that America’s boom in domestic natural gas production is pushing us quickly towards domestic energy independence. He sees both domestic drilling for oil and gas, and energy efficiency getting a boost in 2013, which will decrease our reliance on imported oil. In addition, the high price of oil will likely continue into the future, naturally supporting the purchase of more fuel-efficient cars.

Add all these trends together and it seems that there are sunny skies ahead for the solar industry in 2013 and beyond. With government subsidies still in place and prices for solar components continuing to fall, it’s never been a better time to install solar. In Hawaii, we’ve lost some of the state solar tax credits, but at Sunetric we’ve leveraged industry partnerships and internal best practices to keep the final price to our customers the same. With the advent of better technology and wider understanding of the benefits of renewable energy, it seems hopeful that we will be able to reach and possibly exceed our stated clean energy goals in the coming decades.