It was a wild week in the solar industry, full of unforeseen product releases and a controversial solar pricing report that was released by the government. An NREL report that confirmed price inflation by SolarCity and other top solar installers, Tesla’s big solar panel reveal and exciting growth in solar storage in certain states are the three stories we’re studying from this week’s Solar News Report.
Chicago and Portland pledge to lead nation in renewable energy
As renewable energy becomes more affordable and more pragmatic, municipalities across the country are making bold commitments to clean power to help solidify a path towards lowering America’s carbon footprint. There’s a trend among U.S. cities towards 100% renewable adoption: last year San Francisco passed a mandate that requires all new commercial construction in the city to include a solar power system.
Now, this past week, Portland joined a list of 25 cities that have pledged to run 100% on renewable power by 2035. Chicago also made a big commitment this week: all public buildings in the city will run entirely on renewable power by 2025. Though these pledges each provide a realistic timeframe for achievement, both are bullish and embody a growing consensus among city governments to transition completely to clean power within the next two decades.
Solar storage heating up in the U.S. with new tax incentives
Over the past few years, it has become increasingly clear that battery storage will be one of the major determining factors for the success of solar energy in the U.S. On paper, installing a solar system makes great financial sense, and recent large-scale bids have suggested that solar is now the cheapest energy source in the world. In 2017, the real question mark for solar is around practicality: what should a homeowner do during nighttime if they want to go completely autonomous and not rely on the electric grid whatsoever?
A number of solar battery manufacturers (Tesla, Sonnen, LG) have answered the call, and state governments are ramping up their support. This past week, Maryland passed a state tax credit for storage that will offer a 30 percent subsidy for purchases up to $5,000 for residential and $75,000 for commercial projects. Thanks to this credit, Maryland homeowners can now buy a Tesla Powerwall or LG Chem and get a sizable rebate on their state taxes – sufficiently upping the incentive and economics of solar storage. On the northern front, Vermont’s Public Utilities Commission is currently reviewing a bill that would expedite storage growth across the state.
NREL report: Large solar installers charge more than small companies
This past week, the United States’ National Renewable Energy Laboratory (NREL) at the Department of Energy published a new report that suggested the largest solar installers (e.g. SolarCity, Sunrun) are charging higher prices than their smaller local counterparts. NREL used solar quote data from the EnergySage installer network and large installers to study the effects of company size on solar pricing. After comparing quotes made to the same customers, the report found that quotes from large installers are $0.37/W to $0.73/W (or $3K to $5K) higher, on average, than their smaller local competitors (see page 9 of report).
In almost all other industries, larger companies typically offer lower prices to consumers due to economies of scale. That’s not happening in solar. NREL found that large installers are exercising their market power to charge more than their smaller competitors by:
- exploiting customer unfamiliarity with solar and a lack of price transparency
- leveraging large advertising budgets to create the perception of added value
The second finding by NREL was that quotes on EnergySage are $0.30/W lower (or $2K on average) than outside of EnergySage, due to the ability of consumers to comparison-shop multiple quotes. “Results suggest that customers could benefit from obtaining more quotes before making a decision, and all customers could benefit from increased competition” said the report.
Tesla unveils standard solar panel offering in addition to solar roof
With the majority of buzz around Tesla’s entry into the solar industry focused on its illustrious roof product announced last fall and its acquisition of installer giant SolarCity, many were surprised this week when the automaker unveiled a traditional solar PV panel product that Panasonic will manufacture. These new Tesla solar panels offer one simple value proposition: stylish and blended integration that won’t stand out, a characteristic that is consistent with past remarks made by Elon Musk.
Musk has argued that more manufacturers need to focus on the aesthetic of solar and recognize that many homeowners do not want a bulky clean power apparatus that clashes with the design of their roof. The panels released last week are black on black with a hidden mounting apparatus and do a good job of blending with the look of a typical roof. The industry reacted strongly to the unexpected teaser images of these panels. However, as with Tesla’s solar roof product, these images are still purely speculative with no concrete pricing or release information yet available to the public.