On June 25th, President Obama appeared before a crowd in Washington DC to discuss the second part of his plan to cut carbon emissions and utilize renewable energy sources. The President’s goal is to put into action and enforce many of the initiatives he set out to accomplish in his previous climate change plan. Obama plans to utilize solar energy in his strategy to decrease the dependence on fossil fuels.
The President elaborated his reasoning behind enforcing his climate change action plan when he said, “This plan begins with cutting carbon pollution by changing the way we use energy, using less dirty energy, using more clean energy and wasting less energy throughout our economy.”
Although President Obama was able to double the amount of renewable energy that was produced during his first term, he is determined to enforce new policies that will allow renewable energy to double from what it was in 2012; the President hopes to reach this goal by 2020. One of the policies the President would like to push into effect is to have all federal buildings receive 20% of their power from renewable energy sources by 2020.Obama feels it is important for the federal government to show their commitment to the climate change plan of action by setting an example for the commercial and utility sectors. Obama’s plan includes an effort to tighten standards in order to make an effort in reducing carbon emissions by 3 billion metric tons by 2030. The Department of Defense, which is one of the largest consumers of energy, has committed to the implementation of 3 gigawatts (GW) of renewable energy, especially that of solar energy, by the year 2025.
Rhone Resch, who is the CEO and President of The Solar Energy Industries Association (SEIA), showed his support for the President’s effort to cut carbon emission through the use of clean energy, when he said,
This is our moment in time. America’s solar energy industry stands ready to do our part to help fight climate change and usher in a new era of clean energy in America and around the world. Despite what some critics say, this isn’t a choice between clean energy and a robust economy. We can have both, and solar is showing how to make that possible. We commend the president for offering a bold, decisive plan to combat climate change and to mitigate the impacts of carbon pollution.
With more emphasis on the use of clean power and proposed legislation stemming from President Obama’s plan to cut carbon emissions, the solar industry expects to see a rise in solar installations across the country, especially with utility and commercial solar installations.
As the solar industry gains momentum, it’s quickly becoming one of the most promising up-and-coming markets nationwide. According to a recent report issued by GTM Research and the Solar Energy Industries Association (SEIA), the industry kicked off the year with its most profitable quarter to date. The report revealed that while the utility solar market delivered impressive returns, rapid expansion in the residential sector accounted for a 53% increase in solar generation year-over-year.
Advocates of solar energy contend that its potential for long-term savings far outweighs the upfront cost of installation. But, upfront financing is a substantial obstacle for developers and owners of commercial properties who are struggling to regain financial stability in the wake of the recession. The GTM and SEIA report revealed that solar financing solutions now support more than two-thirds of residential solar installation in some states. The trend is expected to continue in the commercial market, especially as commercial development is on the rise nationwide.
The solar industry boom is heavily influenced by government funding, as is evidenced in California, where homeowners are eligible to receive a 30 percent federal investment tax credit in exchange for participating in solar utility programs. But, the cost of solar generation is expected to decline, which will spur growth in the industry by increasing its accessibility to an expanding customer base.
In particular, solar companies are working to cut soft costs by developing new market strategies and placing an emphasis on intuitive, accessible online tools. As technological advances catch up with solar industry demand, rapid expansion and record-breaking profits are expected to continue.
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As the US solar energy market remains a worldwide leader in clean energy mergers and acquisitions, experts predict that it will continue to attract new investors.
The attractiveness of the solar sector can be due to the variety of solar installation types and the different financing models available for commercial, residential or municipal projects. According to a top accounting and consulting firm, another attraction to the solar industry for investors is the fact that solar power projects can be seen as stable assets with predictable returns.
Survey results showed that out of a group of investors surveyed, 63% would like to invest in solar photovoltaic (PV) projects. In 2012, the United States installed 3 gigawatts (GW) of solar power, with additional contracts for the installation of 5 more GWs to come in 2013.
Within the United States, California has become the leader in the production of solar power. California passed the 2,000 megawatts (MW) mark this past Friday, on June 7th. The 2,000 MWs produced on Friday, is equivalent to 5% of California’s overall energy demand. California, and the United States as a whole, still lag being Germany in terms of total solar installations YOY. With advances in technology, reduced prices in solar modules and the availability of solar financing models, more investors than before are looking to invest in the United States’ solar industry.
Last Friday, California set a new daily record for solar electricity production. The record didn’t last long. A new record was set on Monday: 2,104 MW. With summer approaching, don’t expect this record to last for long.
Although the solar photovoltaic (PV) industry was expected to consist mainly of solar farms/utility scale installations, the industry is seeing a rise in distributed solar. Distributed solar refers to electricity that can be produced at or close to the place where it is used. Distributed solar has the potential to offset the demand of peak electricity in addition to helping stabilize the local grid.
The changing solar market and the progression from solar photovoltaic (PV) utility installations to distributed solar PV installations can be attributed to the lower cost of PV panels, advances in technology, and the development of effective residential and commercial financing models. Statistics show that in 2012, annual distributed solar systems accounted for about 69% of all solar PV systems worldwide. In North America, mainly in the United States, distributed solar grew 42%. Worldwide, distributed solar PV installations are projected to generate around $540.3 billion in revenue from 2013 to 2018.
The United States is striving to reach grid parity, which occurs when energy from the PV solar panels can generate electricity at a cost that is less than or equal to the price of purchasing power from the electricity grid without the use of government incentives. Reaching grid parity will be significant for the solar PV industry, especially for distributed solar because it will allow for solar power to become a competitor for widespread development without the help from government subsidies.