There is really only one
reason. The industry is maturing and it
is delivering the same value equation the grid provides in terms of cost. Thus consumers can make a choice without a
financial penalty.
It took much longer than
I expected but we were always talking about an equal value delivery. Throw in a battery solution and the value
equation becomes unstoppable because going off grid does become a viable option
for any homeowner.
That will take home
building generally by storm. You will
quickly discover that everyone wants it.
Link those batteries to the electric car and we have a fully distributed
energy protocol that can step lightly around all problems for which the grid is
actually an extra that will cease to be put in.
Five Reasons Why US Solar
Growth Is Going To Explode
We just told you that if current rates hold, there will be one new solar
installation built in the U.S. every 83 seconds by 2016,
for a total of 9 gigawatts.
Deutsche Bank's Vishal Shah, Jerimiah Booream-Phelps and Susie
Min are out with an even more bullish projection: they think that the U.S.
could hit 50 gigawatts (although this would still only be 2% of the entire U.S.
energy picture):
They offer five reasons for their outlook:
1) Solar is already
cost competitive in 10 states
Deutsche Bank estimates the levelized cost of energy for solar to
be $0.11 to $0.15 per kilowatt hour, compared with $0.11 to $0.37 kilowatt hour
for retail electricity, for states including New Jersey, New York, Connecticut
and Vermont (along with the usual suspects like California). "Considering
the improved economics of solar in these markets along with other growth
enablers such as solar leasing, availability of low cost financing, we expect
installed capacity growth of ~600% over the next 4 years," they write.
2) Solar will soon be
cost competitive in 12 other states
Electricity in the existing parity states is slightly more
expensive. But Deutsche Bank predicts the overall cost of solar will decline to
$2.50 from $3.00 over the next 18 months, at which point states that enjoy
historically cheaper electricity including Pennsylvania, Massachusetts and
Maryland, along with Washington DC, will see parity.
3) Renewable
corporations are getting smarter about how they're structured
More companies are creating "C" corporations that act as
holding companies for renewable assets. These are also known as YieldCos. RenewableGridMag has
compared YieldCos to REITs and MLPs, which enjoy special tax breaks. "If
investors value MLP and REIT assets at 7% to 8% distributable cashflow yield,
there is good reason to believe they will value renewable assets at similar, if
not lower, yields." Deutsche Bank says the tax benefits enjoyed
by YieldCos can reduce solar financing costs by up to 300 bps, "in
addition to providing significant amount of liquidity within the solar
sector." Ultimately, YieldCos can bring the levelized cost of energy down
to $0.08-$0.14 per kilowatt hour from $0.10 to $0.16.
4) The expiration of
the solar investment tax credit in 2016 could see a flurry of new installations
coming on line.
Currently, the ITC stands at 30% of the cost of purchase. Deutsche
Bank assumes there will be a big new push into solar as the ITC expires. But if
it's extended Deutsche Bank estimates a full 47 states will be able to reach
grid parity.
5) Solar leasing is
booming
Solar leasing allows residents to get solar installed on their
home for free, and pay nothing for maintenance. Deutsche Banks says solar
leasing firms are already "highly profitable" and will see greater
incentive to go after users before the expiration of the ITC in 2016.
The revolution is real.
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