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What 2020 Means for Solar




As we wrap up the holiday season, we can officially turn our eyes toward 2020 and the upcoming new year. If you didn't get your residential or commercial solar panels installed in 2019, there are some big changes that you should be expecting for this year. Luckily, our team has put together some helpful information to help run down all the updates and changes to the solar industry for the new year.


Tax Credit Drops


First and foremost, the biggest change you can expect in 2020 in terms of solar is a decrease in the solar investment tax credit (ITC). In 2019, a new solar installation came with a 30% federal tax return credit, meaning your cost for installing a new residential solar panel system would be reduced by nearly one third. Thousands took advantage of this incentive, and 2019 was one of the busiest years ever in the solar industry.


However, Congress did not extend the tax credit in full for the new year, meaning that the ITC rebate will drop to 26% in 2020 (and then continue to decrease annually through 2021). While the decrease means you won't save as much on your panel installation, there's still a lot of incentive to get your system installed as soon as possible, as the rebate will continue to decrease, and then will only be available to commercial and utility-grade projects starting 2022.


California Solar Mandate Begins


In 2018, California passed legislation that required that all new homes built after 2020 must come equipped with solar panels. California has long been a leader in the nations trends regarding energy, and many eyes will be on the west coast state to see how the solar mandate impacts energy consumption, home prices, consumer confidence and many other factors. There have already been rumors of other states considering similar initiatives. As the new year unfolds, keeping an eye on the successes and/or struggles of this mandate could go a long way to determining what residential solar looks like in the new decade.


Solar Battery Prices Decrease


By and large, solar energy is an intermittent energy source - solar panels produce power when the sun is shining and don't when it isn’t. Energy storage allows the solar system to supply power when the sun has set or in cloudy weather, expanding the capabilities of solar energy systems.


There are two main types of solar batteries: lead-acid batteries (like you have in your car) and lithium-ion batteries. The latter is far more advanced, longer-lasting, and requires less maintenance. Not surprising, lithium-ion batteries have a higher upfront cost, but the price has been decreasing significantly in recent years. The cost of lithium-ion battery storage fell 35 percent from the first half of 2018 to now (December 2019) and 76 percent since 2012. This downward price trend is good news for renewable solar energy in 2020 — and it’s likely to continue.


On the residential side, more homeowners are relying on solar systems with battery storage for emergency power during grid outages than ever before. This is an especially attractive option in areas prone to extended power outages due to natural disasters or with inadequate utility infrastructure, like Puerto Rico.


Demand for Off-Grid Solar Increases


Solar systems with energy storage are surging in popularity for a few reasons. The cost of solar batteries is decreasing, meanwhile, the prevalence of grid outages has climbed. There was a 30 percent increase in grid outages between 2009 and 2019, with a total of 37 million people affected in 2019. Blackouts can cause property damage, including frozen pipes and flooded basements.


Hundreds of thousands of customers lost power in Wisconsin and Dallas County in 2019 due to severe thunderstorms, resulting in millions of dollars of damage. In California, intentional blackouts have been utilized to prevent wildfires.


Electric Vehicles Boost Electricity Demand


Surprisingly, electricity demand in most advanced economies has leveled or even decreased in recent years. However, global electric vehicle sales are expected to reach 11 million units in 2020 and then surge to 97 million vehicles in 2025.


According to the National Renewable Energy Labs, electric vehicles could cause a 38 percent increase in U.S. electricity demand. Renewable energy sources, like solar, may help meet that demand. This option allows those who are more eco-minded to use a 100% completely renewable energy source to power their vehicles.


Big Things Ahead in 2020 and Beyond


Make no doubt about it - 2020 is going to be a big year for solar in the United States. Whether you're looking at differences in the cost of residential solar due to the ITC decrease, an increased amount of solar energy production with the new housing mandate in California, a trend toward solar battery options, or an increased demand in electricity due to more and more electric cars on the roads, there are big things coming this year.


Here at IES Solar, we're proud to be a part of the growing solar industry and we pride ourselves on delivering the highest-quality service for our Texas neighbors. Whether you're looking for commercial, residential or industrial solar, or if you just have questions about how any of these developments impact you, contact our team to get a free consultation. We're here to help you, this new year and beyond!



Request A Free Solar Quote Today!


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