Solar Power on the Rise: The Technologies and Policies behind a Booming Energy Sector (2014)

August 2014
Solar power – clean, reliable, and increasingly affordable – is experiencing remarkable growth across the U.S.

Solar power generates electricity with no global warming pollution, no fuel costs, and no risks of fuel price spikes, and has the potential to help move the country toward cleaner, reliable, and affordable sources of electricity.

Small-scale solar photovoltaic (PV) systems, typically on rooftops, account for the majority of solar installations, while large-scale PV systems and concentrating solar power (CSP) systems constitute the majority of solar's overall electricity-generating capacity.

All three are undergoing rapid growth. Given the abundance of sunshine across the country, solar power has the potential to supply a significant amount of electricity that is both environmentally and economically attractive.

Solar power is increasingly affordable

Photo: Wayne National Forest

  • Prices for rooftop PV systems have declined markedly in recent years, dropping 29 percent from 2010 to 2013.
  • Their increasing cost-effectiveness is largely a result of reductions in technology prices, innovative financing, and growing networks of solar installers and financial partners.
  • Tax credits, rebates, and other support in leading states can cut the total costs of a rooftop system to under $10,000, though many solar customers are paying little or nothing up front by utilizing solar leases or power purchase agreements, which provide electricity from the system over a long period at attractive fixed rates.
  • Costs for large-scale PV projects have dropped more than household systems, to an average 60 percent lower than those for residential solar on a per-watt basis.
  • CSP systems have not experienced the same cost reductions, but offer the important advantage of being able to store the sun's energy as heat, and to use it to make electricity when the sun is no longer shining.

Solar power is viable throughout the United States

Photo: Helios Solar LLC

  • The amount of sunlight available for PV generation varies by less than 30 percent across most of the country, making solar power viable even in northern climates.
  • In a sunny location such as Los Angeles or Phoenix, a five-kilowatt home rooftop PV system produces an average of 7,000 to 8,000 kilowatt-hours per year, roughly equivalent to the electricity use of a typical U.S. household.
  • In northern climates such as in Portland, Maine, that same system would generate 85 percent of what it would in Los Angeles, 95 percent of what it would in Miami, and six percent more than it would in Houston.
  • For CSP, the best resources are in the Southwest, though facilities have also appeared in Florida and Hawaii.

Solar power is growing rapidly

Ivanpah CSP plantPhoto: BrightSource/Flickr
    • The amount of solar PV power installed in the United States grew 485 percent from 2010 to 2013.
  • By early 2014, the United States had more than 480,000 solar systems installed, adding up to 13,400 megawatts (MW)— enough to power some 2.4 million typical U.S. households.
  • The U.S. solar industry employed more than 140,000 people in 2013, a 53 percent increase over 2010, and is investing almost $15 billion in the U.S. economy annually. There are currently more than 6,000 solar companies in the U.S., spread across all 50 states.
  • Companies, too, have embraced rooftop solar not only to improve their environmental profiles but also to lower their operating costs.
  • PV systems require no water to make electricity, unlike coal, nuclear, and other power plants. Likewise, solar panels also generate electricity with no air or carbon pollution, solid waste or inputs other than sunlight.

To continue solar power's rapid growth, we must take steps to support its continued acceleration

PV cell in laboratoryPhoto: Pacific Northwest National Laboratory/Flickr

Important focus areas include:

  • Renewable electricity standards. States should maintain and strengthen their key policies for driving renewable energy investments, including solar.
  • Solar tax credit. The federal investment tax credit that has been so important for solar’s rise is set to decline at the end of 2016 from 30 percent to 10 percent; Congress will need to take action to sustain that support.
  • Federal power plant carbon standards. States should ensure that solar plays a strong role in their plans to reduce emissions to comply with the Environmental Protection Agency’s new carbon standards.
  • The full value of solar. Assessing the full range of benefits and costs of solar, particularly rooftop solar, will help policy makers decide the most appropriate way to assist more people in adopting solar.
  • Storage. Lower costs and the greater availability of energy storage technologies will help provide electricity more consistently and at times of peak demand.
  • New utility business models. Utilities should modify their business models to accommodate high levels of rooftop solar and encourage continued solar development, from rooftops to large-scale projects.
  • Research and development. Solar’s prospects will be enhanced by continued progress in reducing costs—through greater economies of scale, increasing cell and module efficiencies, improved inverters and mounting systems, better heat transfer, and streamlined transactions.

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