State of Solar Adoption in 2024
The U.S. Department of Energy (DOE) and Solar Energy Technologies Office (SETO) have set a goal to accelerate solar technology and attain a decarbonized electricity system by 2035 and a decarbonized energy sector by 2050. Meeting these goals requires a nationwide effort to negate the effects of climate change and transition to clean energy. This article will review the nation’s progress and outline the necessary steps moving forward.
2023 Solar Energy Wrap Up
2035 looms in the not-too-far distance with 2050 close behind it. The country is doing its part to reach its goals. 2023 has been a banner year.
The United States, Europe, and China set new records for the most solar installations in a single year. The United States added an impressive 33 gigawatts of solar power this year. However, it fell behind China which added between 180 to 230 gigawatts, and Europe which added 58 gigawatts.
Another achievement is the decrease in the cost of solar panels. The expense of solar panels has been a roadblock for many companies and individuals who wish to switch to renewable energy. Fortunately, 2023 solar prices are cheaper than ever.
The U.S. has seen a 23% drop in solar energy prices year after year and a staggering 42% drop since 2020. It is now the cheapest form of energy in the country.
In terms of states, California has the most solar energy. Texas, Florida, North Carolina, and Arizona are noted runners-up.
Rebates for Solar Energy Incentivize Solar Customers
America’s move to solar has been fueled by tax incentives and rebates. The federal solar tax credit allows solar customers to claim a deduction for a percentage of what they paid on their solar system.
The percentage changes from year to year. It rose to 30% in 2022 and remains the same for 2023 marking an increase from 26% in 2020 and 2021. However, it is predicted to decrease to 26% for systems installed in 2033 and fall to 22% for systems installed in 2034.
The program is set to expire in 2035 but may be renewed by Congress.
Solar customers may also be eligible for rebates from utility companies, renewable energy certificate payments, state government rebates, and state tax credits. However, these could affect federal deductions.
The Push for More Electric Vehicles
The United States also saw an increased adoption of solar vehicles in 2023. A record 1.2 million U.S. new car owners chose to go solar in 2024 putting an additional 1,189,051 new solar vehicles on the streets. Solar now owns a 7.6% share in the U.S. vehicle market, up from 5.9% in 2022.
However, experts are concerned about a quarter-over-quarter slowdown. EV sales increased 40% in the 4th quarter of 2023. The growth is impressive, but it pales in comparison to a 49% gain in Q3.
The industry is addressing slow-down concerns by promising more incentives, more inventory, more lease deals, and improved infrastructure. The Cox Automotive Economic and Industry Insights is calling 2024 “The Year of More”. It forecasts that EVs will have a 10% share of the market by the end of the year.
Additional advances were made in battery production. Manufacturers have determined methods of producing batteries with fewer harmful materials and at lower costs. The reduced battery expense will make solar cars more affordable and move the industry forward.
Challenges with Solar
Advances in solar have been impressive, but the industry is still facing challenges. A notable one is the lack of transformers that connect wind and solar farms and batteries to the grid.
Supply issues have backed up the market with lead times as far out as 12 to 18 months. Costs have gone up as well.
Some developers are forced to order equipment before commercial agreements are in place to ensure they have the supplies they need when they need them. It’s a risky proposition.
Rising interest rates also affect adoption rates. Solar systems are often financed. A 4-5% interest rate increase boosts project expenses and makes installation unaffordable for some people and organizations.
The government is doing its part to address inflation, and increasing interest rates is part of that effort. Inflation has improved and the Feds have hinted that they may be lowering rates by midyear. However, it is unknown how far rates will drop.
Setting the Path for a Clean Energy Future
A new year is upon us, and the United States continues to propel the country closer to our solar goals. The White House has provided over $300 in federal funding to states and localities in the form of grants and tax incentives via the 2022 Inflation Reduction Act and 2021 Bipartisan Law. They are hoping the money will be used to support solar efforts.
Experts recommend that states focus on three crucial decarbonization efforts: offshore wind, electrical vehicles, and electric grid infrastructure updates.
The federal government aims to reach a goal of 30 gigawatts of offshore wind energy (OSW) by 2030, enough to power 10 million homes. The nation’s first large-scale OSW farms, Vineyard Wind of Massachusetts and South Fork Wind of Rhode Island, will begin generating clean energy in 2024.
Dominion Energy of Coastal Virginia will begin construction. Once completed, it may be the largest wind farm in the country.
The Bureau of Ocean Energy Management will do its part by holding 2024 OSW lease auctions throughout the United States. States can tap into this opportunity by attracting companies looking to expand into the OSW industry.
States can also set the foundation for more EVs by increasing tax credits for car buyers and providing more charging stations along freeways and in underserved areas.
The government must also prepare for solar growth by ensuring electrical grids meet the demand. According to Lawrence Berkley National Laboratory, more than 10,000 projects, accounting for 1260GW, are waiting on interconnection. Fortunately, recently allocated funds made available through the Grid Resilience and Innovation Partnership (GRIP Program) have states primed for grid updates that will serve 35 GW of renewable energy.
America is in a race to reach its solar goals. 2023 was an impressive year and the future looks bright. But challenges are always present.
It’s a real cliffhanger, but with any luck, we will soon see a cleaner America.
