October 13, 2010

When Will Solar Go Mainstream?

How much of the electricity in the U.S. comes from rooftop solar panels and solar power plants? If you guessed less than one-tenth of a percent, you’d be right.

A solar industry veteran from a leading solar panel manufacturer described a not-so-scientific method of assessing solar power penetration. He called it a “rooftop survey via neighborhood stroll” and even when performed in his sunny California neighborhood, yielded only the occasional sighting,

Why hasn’t solar caught on in the U.S.?

To the average power user, solar is too expensive or too complicated to install. And it often doesn’t make economic sense. The payback might take eight, ten or even 14 years after rebates.

In order for solar to reach the average consumer it has to get simple, it has to get cheap and has to be easy to finance.

Simplifying the Process: Getting solar on your rooftop entails a number of visits from an installer and a paperwork load to deal with rebates and utilities that rivals the U.S. tax code. Organizations like SolarTech and companies like Sungevity, SolarCity and Clean Power Finance are working on simplifying that process. Modular racking and integrated inverters meanwhile have eased installation.

Financing: When you buy a new car — you can obtain financing within twenty minutes. Solar doesn’t have an equivalent. Some organizations have come up with novel programs in which consumers lease panels, or sell consumers power from the solar panels on the roof that the solar power provider technically still owns. States passed PACE programs that would have let homeowners pay for their solar systems as a supplement to their property tax, but rulings from Freddie Mac and Fannie may have put a kibosh on that for now.

Lowering the Cost: Technological progress and increasing scale has allowed solar modules to drop from$300 per watt in 1956, to $50 per watt in the 1970s, to $10 per watt in the 1990s, to under $2 per watt in volume today. Installed, a utility might pay $4 a watt while a consumer has seen solar drop from the $8 range to around $6 in two years. Still, we aren’t at the magic tipping point yet.

What do you think? Is technology and greater efficiency the answer, or do solar companies have to improve their marketing and financial mechanisms to get this market to move?

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