The economic uncertainty generated by the COVID-19 pandemic has impeded job growth and the future outlook for a large number of industries. When it comes to the solar power market, one of the fastest-growing industries in the U.S. over the last 5 years, there are several important factors to consider when predicting what the future of solar energy will look like on the other side of the pandemic.
Record-breaking Numbers Pre-COVID
Prior to COVID-19, the solar industry was on track to continue its two-decade growth trajectory. In mid-January, the Energy Information Administration forecasted an addition of 13.5 GW to solar capacity in the U.S. in 2020, nearly double the previous single-year high in 2016. The first quarter of 2020 also saw a record-breaking number of installations, accounting for roughly 40% of all new electricity generating capacity added during that period in the U.S. While these numbers have since gone down significantly since the beginning of the second quarter, the initial numbers indicate that solar was on track for a big year in 2020. Despite the economic slowdown across most industries, many heavy construction projects have been able to continue albeit at a slower pace. There could be greater potential for strong solar growth once states are safely able to lift restrictions, continue construction and resume economic activity as usual. However, a major concern for many solar projects is the timeline for connection to the grid which is usually provided by the local transmission or utility operator. Many projects are nearing completion, but won't have grid backfeed when they planned. This may impact many projects being able to finish in 2020 and qualify for renewable tax credits.
Utility and Residential Strong
Despite the coronavirus pandemic beginning to take shape at the tail end of March, residential solar saw its largest amount of quarterly installations on record this year. Total non-residential installations (which include commercial, government, nonprofit and community projects), while not nearly as fast-growing, experienced an 8% increase over the same time last year. And despite a large number of halts after March, the utility solar market is still on pace to meet its projection of adding 14.4 GW of new capacity this year, making it the biggest year on record for utility PV.
Incentives and Declining Costs
Declining costs and incentives being put in place for states to reach renewable energy goals are another reason to believe that the future of solar energy will be bright. Solar costs have decreased at a significant rate due to improvements in technology, an influx of experienced developers, and increased competition. It is unknown how the availability of federal investment tax credits will play out in the near future, but recently the House Ways and Means Committee included a Growing Renewable Energy and Efficiency Now (GREEN) Act as part of a $1.5 trillion House infrastructure package that includes an outline for a 5-year extension of the solar Investment Tax Credit (ITC).
The Load Bank Testing Advantage
Solar plant owners and operators have had to discover new and modified ways to test and commission their facilities due to COVID-19. For solar projects that are facing delayed grid connection, it is important to get construction back on track as quickly as possible in order to meet deadlines and stay on budget. The flexibility and convenience of load bank testing through grid-emulation is the most effective way to test and validate a facility to ensure a quick commissioning process and maintain proper equipment functionality. As soon as the construction phase of a solar project is complete, comprehensive load testing can begin. Rather than waiting on a grid connection, a grid emulation system using load banks provides an instant opportunity to energize a facility to 100% and simulate real-world conditions to test the safety and efficiency of the facility. Load banks provide the opportunity to accurately implement the necessary commissioning load tests when you need them, to help you meet deadlines and regulations required for tax credits and incentives. Comrent’s team of load bank experts are ready to help you keep your solar project on track and guide you through the commissioning process.
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