As we enter 2024, the solar industry stands at a pivotal crossroads, facing both unprecedented challenges and exciting opportunities. To assess and address solar’s potential in 2024, we collaborated on a webinar with a panel of our friends at Solar Power World and the experts on our team.
The panel featured:
- David Maurer, Director of Corporate Sales, Aurora Solar
- Bogdan Zlatkov, Sr. Content Marketing Manager, Aurora Solar
- Curtis Merring, Sr. Product Marketing Manager, Aurora Solar
- Billy Ludt, Senior Editor, Moderator, Solar Power World
In this first installment, we’ll analyze the three biggest trends these experts expect to see in 2024. And in the second installment, we walk through clear strategies to make the most of them.
The new solar economy: Room for optimism
In his comprehensive analysis of the economy, Curtis Merring highlighted that despite inflation fears, current rates of 3.2% are showing signs of decline, giving economists a sense of cautious optimism. This sentiment is reinforced by the Wall Street Journal’s forecast of impending interest rate cuts.
Of course, each of us in the solar industry is well aware of the fact that rates of energy prices are outpacing inflation. But it’s not just us. This concern also echoed by 62% of homeowners who anticipate further rises in energy costs.
This backdrop sets the stage for continued significant growth in the solar sector. When all is said and done, PV installations are projected to have surged by 32% in 2023, reaching an impressive 320 GWdc. Globally, Germany emerged as a leader in the European Union, while the U.S. solar market is expected to have witnessed a robust 52% year-over-year growth.
The Inflation Reduction Act (IRA) plays a pivotal role in this scenario, estimated to support 403,000 jobs annually across the clean energy sector. The IRA is poised to drive substantial gains, particularly in electric vehicles (185,000 jobs), battery storage (48,000 jobs), and solar (35,000 jobs), while also propelling numerous PV projects. Furthermore, the IRA is expected to inject an impressive $156 billion into America’s GDP.
The effects of NEM 3.0 regulations
The recent shift to Net Energy Metering (NEM) 3.0 in California, as explained by Bogdan Zlatkov, marked a significant turning point for the solar industry, particularly affecting return on investment (ROI) calculations. NEM 3.0 introduced three major changes: higher Time-of-Use (TOU) rates, lower export rates for solar energy, and consequently, longer payback periods. These changes are poised to have the most profound impact on small and medium enterprises (SMEs) and businesses operating solely within the state.
This forecast triggered a surge in PV installations before the April 15, 2023 deadline as customers and installers rushed to capitalize on the more favorable terms of NEM 2.0. After that surge, one of the most notable outcomes of this transition was the predicted 38% market contraction in California’s solar sector in 2024.
To overcome these new challenges, solar installers need to focus on better educating homeowners — approximately 49% of whom have expressed a desire for more detailed explanations on how PV panels, energy storage, and electric vehicles (EVs) function and interconnect. A crucial aspect of this education involves a deeper understanding of TOU rates and how they influence energy consumption and savings. By tailoring solar (+ storage!) solutions based on individual consumption habits, installers can still maximize savings for their clients despite the new NEM 3.0 constraints.
Storage growth trends in the PV industry
The solar storage sector is witnessing a significant transformation, as highlighted by Bogdan and Curtis. Residential storage is expected to grow by 18%, while non-residential storage will likely see an 8% increase. This growth is evident in the performance of major public energy companies. Sunpower reported a 60% battery attach rate in California, Sunnova saw a 34% attach rate in Q3 2023, and Tesla’s storage installations soared by over 90% year-over-year in the same quarter.
Legislative incentives, including federal tax credits, are playing a vital role in propelling the growth of solar storage. Similarly, the changes brought about by NEM 3.0 are creating increased demand for storage solutions — they offer a way to optimize energy savings under the new utility rate structures.
Check out the tour below to see how strategies like storage self-consumption can help optimize solar + storage ROI.
Those are just three of the trends we’re watching. Check back next week for some of the strategies installers can use to keep that growth arrow going up and to the right in 2024.
In the meantime… Click here to watch the entire webinar on-demand.