Last year, we packaged our 2021 hopes and predictions for the solar industry in the 12 days of solar Christmas. In retrospect, our industry only achieved 7 out of the 12 things we had hoped for. However, we nailed it on one key prediction - it was a wild ride this past year.
Let’s do something the pundits never do, go back and see which predictions we hit and which predictions we missed.
Predictions we hit
No More Tariffs (2nd day of Christmas)
As of mid November, the threat of enhanced and extended tariffs was rejected by a US court. In a rare and confusing alignment between the Biden and Trump administration’s position, the tariffs would have targeted bifacial modules and increased the overall tariff rate on solar imports from 15% to 18%. This decision gives us a fighting chance to reach the Department of Energy’s 40% solar penetration goal by 2035.
Municipal Climate Action Plans (6th day of Christmas)
There has been continued and renewed climate commitments from municipalities and utilities. So much so, that we need trackers to keep everything straight. SEPA is tracking utilities, showing that 51 utilities have adopted a voluntary 100% carbon-reduction target. The number of cities on the CDP- (Carbon Disclosure Project) disclosure list is up 63% in 2021. Transparency gives us a chance to measure and then hold our institutions and collective civic bodies accountable.
New Module Form Factors (7th day of Christmas)
Modules have incrementally increased in physical size, unlocking another layer of material efficiency with racking and the balance of systems. Though there have been some grumblings from the installers in handling the larger panels, it is promising to handle fewer pieces to achieve a lower cost and more powerful system.
Though not specifically pertaining to modules, we did get innovations in inverter technologies. Finally a grid forming inverter without batteries is hitting the market in Q1 of 2022. The notion of sunlight backup is here and we are excited to see this new dimension of the customer’s solar journey unfold.
Expanded EV Charging (8th day of Christmas)
EVs are on a roll. The momentum among manufacturers has not slowed, but now the imperative for the charging infrastructure to keep pace has been codified. The recently signed infrastructure bill set aside $7.5 billion for EV charging and related programs. The target is to have 500,000 public stations by 2030.
More R&D (9th day of Christmas)
The Department of Energy has increased funding through SETO (Solar Energy Technologies Office) up to $386 million in FY2022, up from $280 million in FY2021. In a positive development, the BTO (Building Technologies Office) is also participating in research into Architectural Solar, a new collaboration among federal agencies.
More Community Solar (10th day of Christmas)
Our industry has made a strong effort in identifying new ways to bring solar to a broader customer base. Community solar is up 16% from last year, and there are renewed interests in the science behind leveraging community networks to spread the good word of solar in LMI communities.
A solar software stack (12th day of Christmas)
Last year we asked for a Bodhi in a pear tree on the last day of Christmas. What we got was a whole suite of compatible software tools (like from our friends at Blu Banyan, Scanifly, SolarNexus, and DemandIQ) that together build an effective stack of technology to propel solar companies into the future.
Predictions we missed
ITC Extension (1st day of Christmas)
Though the COVID Relief Bill extended the ITC by 2 years, we say the jury is still out. At the start of the year, there was an ebullient sense of the ITC extension and elevation to 30%. It has made it into the Build Back Better legislation, but we are hanging by a razor thin margin as to its passage and ultimate enactment.
On the plus side, the bill includes manufacturing tax credits for domestic production of inverters, trackers, modules, cells, wafers and polysilicon. It will be worth the wait to have a manufacturing incentive paired with a market incentive to grow capacity and demand simultaneously.
ITC for Storage (3rd day of Christmas)
The fires in California and the ice in Texas have unlocked climate driven demand for residential storage. Globally, storage capacity is set to triple in 2021. In several major markets, the calculus for energy security has changed, giving storage enhanced appeal, but it still doesn’t address the need for broader penetration of DERs which can deliver community and grid level resilience.
For this we are still waiting on the final outcome of the Build Back Better draft legislation. A standalone ITC for storage will signal the vital importance of this technology to modernize our grid by enabling consumers to participate more powerfully in its resilience.
Carbon Based Pricing (4th day of Christmas)
COP26 gave us a reality check into the real challenges of mobilizing the international community towards actionable, measurable goals. Even though economists agree that carbon based pricing is the best mechanism to incentivise carbon-free solutions, the difficulties of international alignment have become more apparent.
That being said, a strong voice has emerged from the business community. In the recent report from the ICC (International Chamber of Commerce), the business community outlines 10 clear principles to organize a consistent approach towards international carbon pricing. Comments the co-chair of the ICC Task Force:
“Besides a wealth of knowledge and different perspectives, the discussions in preparing these principles show an overwhelming willingness and interest of business to engage and contribute on carbon pricing mechanisms, so as to speed up the energy transition and make actions toward achieving net zero emissions more tangible.”
Wholesale Energy Markets (5th day of Christmas)
Rule 2222 promised to open up the wholesale market for new forms of DER aggregation, which can spur new business models and realizable value streams for DER owners. But where are we? For each of the wholesale markets, compliance filings have slowed the implementation process. Are we there yet? outlines the various milestones across key utility markets.
Enhanced Workforce (11th day of Christmas)
The solar industry has grown despite the challenges of COVID and supply chain bottlenecks. Residential solar is up 46% from Q2 2020 and projections through 2026 are to break records every year. But do we have the talent to realize this? Linkedin feeds are filled with job openings, and our industry is competing with the tech giants whose growth have not slowed one bit. Our saving grace? The solar industry has been and will always be filled with missionaries not mercenaries.
Conclusion
Despite the headwinds that can sometimes come at us, our solar industry has persevered everytime. At Bodhi, we enter this holiday season with renewed energy but also with anxiety of the enormity of the work ahead of us. We are nonetheless grateful for our abiding customers and the work they do every day to move more people along the solar journey, and we commit to make each solar journey an unforgettably amazing experience.
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