Wednesday, November 20, 2013

Avoid the AZ Solar Fee - Go Solar Now and Lock in your Savings!

Now's the Time to Go Solar! 

Recently, the Arizona Corporate Commission (ACC) voted to apply a small monthly solar surcharge for customers who install solar on their homes (click here to read more). Since this change does not take effect until January 1st, 2014, this means you can avoid the monthly surcharge altogether by going solar now.

Phoenix is the perfect location to get into solar, and now's the time. With the sun shining all year long, take advantage of the natural resources you have right at your fingertips -- or in this case, on your roof! The Phoenix area also has strong financial incentive, which makes solar panels even more affordable. 

How does the net metering reform affect APS customers?
·       If you currently have a solar system on your home, you will not be affected by these changes.
·       Customers who sign a solar contract by December 31, 2013 will also avoid the fee increase.
·       Customers who sign a solar contract after January 1, 2014, will be subject to the new monthly surcharge; this fee averages to be about $5 per month.

If you're thinking about installing a solar system on your home, you still have time to get a lower price locked in! Support your community by working with a locally owned and operated office. Start saving today by contacting your local Phoenix Solar Universe office at: 602-431-9626 or

Marc Owen
Owner / Operator
Solar Universe Phoenix

Monday, October 21, 2013

Downstream Solar Heats up with Aggressive Moves

The flood of financing continues as more financial institutions clamor to invest in this new asset class.
Continued growth in residential solar financing is going to require better customer acquisition methods and access to more and inexpensive money. We've watched the aggressive moves made by SolarCity, Vivint, Solar Universe, and others in customer acquisition.
As far as financing is concerned, Vivint just raised two more rounds, totaling -- wait for it -- $540 million, though the names of the investors weren't divulged. That's on top of the $200 million fund that was raised in the summer. Vivint is the second largest solar installer in the U.S. behind SolarCity.
“In less than three months, Vivint Solar has raised nearly three-quarters of a billion dollars to finance our solar projects,” said Greg Butterfield of Vivint in a statement. “These new financings will enable Vivint Solar to continue its unparalleled growth, while delivering simple, affordable solar solutions to our customers.”
Here's a roundup of recent activity in this sector.

Bank debt moving back into solar

  • OneRoof Energy is now offering both secured and unsecured loans for solar systems. OneRoof's new financial products include secured loans of up to twenty years and unsecured loans with terms up to twelve years.
  • Canadian Solar (CSIQ) just launched its Residential Financing Program targeting the U.S. residential solar market in partnership with privately held Admirals Bank. Customers can borrow up to $40,000 for a residential solar installation, subject to credit approval.
  • The Digital Federal Credit Union "may provide up to $100 million" in loans for its members (up to $50,000 per member) to finance solar projects with PV modules from SunPower. It's a novel customer acquisition strategy with DCU acting as lead originator for a group of 36 credit unions formed to support SunPower's residential loan or lease programs.

More funds, more M&A

  • In August, SolarCity acquired its direct marketing partner, Paramount Solar, for $120 million. Last month the solar installer and financier teamed up with Viridian, a retail energy services provider in the Northeast U.S.
  • Last week, SolarCity announced that it had acquired solar mounting hardware startupZep Solar.
  • Solar Universe added two new franchises in New York and New Jersey. The companyacquired Gen110 in September.
  • Brightergy and Black & Veatch formed an alliance to develop $100 million in solar projects ranging from 25 kilowatts to 2 megawatts over the next three years, including commercial rooftops in Kansas City. Brightergy acts as the project developer and provides sales, marketing and financing resources. Black & Veatch provides engineering, procurement, construction and consulting.
  • Sunrun and Nest have teamed up. "Under the partnership, Sunrun customers can get a $250 Nest thermostat for free, along with another $250 credit for electricity; Nest customers interested in solar can get a $500 voucher for a Sunrun solar system," as reported by Katie Tweed.
  • Vivint Solar of Provo, Utah secured $200 million in two new tax equity funds to finance solar power systems on residential rooftops. Vivint Solar is the solar integrator and PPA financier unit within Vivint. Vivint is notable for its sales network and low cost of customer acquisition. The company was acquired by Blackstone for $2 billion in September of last year. Vivint Solar was the second-largest U.S. residential solar installer in the first half of 2013, according to the GTM Research U.S. PV Leaderboard.
  • In April, residential solar financing startup Clean Power Finance (CPF) announced the $37 million piece of a $60 million equity round that included Edison International (NYSE:EI), Duke Energy, Clear Sky, NextEra Energy's Investment arm, and Dominion. CPF has closed on an additional $20 million in equity capital from funds in the United Arab Emirates. CPF manages hundreds of millions in project finance funds for corporations and institutions.
  • SunPower's residential lease program has signed up a total of 18,400 customers and has about 147 megawatts booked to date with $528 million in net aggregate payments. SunPower just raised $150 million in new residential lease financing.
  • Sungevity, the solar sales, financing, and software startup, won $125 million in new venture capital and project financing in January and landed another $15 million in funding, including investment from GE Ventures just last month. Previous investment has come from Brightpath Capital Partners, home improvement store Lowe's, Vision Ridge Partners, Firelake Capital, Craton Equity Partners and Eastern Sun Capital Partners.SolarCity (SCTY) joined with Honda Motors on a $65 million residential solar project fund for the benefit of Honda and Acura car buyers earlier this year.
  • SolarCity also raised $500 million from Goldman Sachs in May.
  • OneRoof has raised more than $80 million in operating capital and finance capital from Hanwha, Black Coral Capital, U.S. Bank, The Quercus Trust, Yellowtree Energy, and Spring Ventures.
  • In June, Sunrun announced three new funds totaling $630 million. Investors include JPMorgan and U.S. Bank. While U.S. Bancorp (NYSE:USB) has been a big supporter of residential solar, this is the first entry for JPM Capital Corporation, a subsidiary of JPMorgan Chase & Co. (NYSE:JPM). Sunrun CEO Ed Fenster said, “It is the largest and most consistent provider of capital to renewables, but until now most of their investments have been in wind. This is a watershed moment."
  • SunEdison acquired EchoFirst, a solar, hot water, and conditioned air provider, along with a dedicated $50 million fund. SunEdison also announced that Wells Fargo looks to invest more than $100 million of tax equity financing in 2013 and 2014 to fund solar DG projects developed by SunEdison in the U.S.
GTM Research sees the residential solar financing market in the U.S. growing from $1.3 billion in 2012 to $5.7 billion in 2016.
Shayle Kann, VP of Research at GTM, pulls it together here: "The flurry of investment activity in the U.S. residential solar market reflects four trends on which we have been focusing recently at GTM Research. First, residential solar financing via leases and PPAs continues to be the dominant model today, with over a dozen companies now offering solutions in that space. Second, financing options are diversifying and debt is beginning to make a resurgence, as evidenced in part by SunPower's deal with the Digital Federal Credit Union. Third, retail electricity providers are increasingly viewing solar as a potential differentiator among their competitors, and we expect to see more partnerships like the SolarCity/Direct Energy deal over the next three months. And finally, customer acquisition is the new 'hot' space for residential solar innovation, and the M&A in that landscape is just beginning."

Saturday, August 24, 2013

Great Solar Facts!

Rhone Resch 
August 23, 2013  |  1 Comments
Every day, I talk to groups and reporters about the amazing growth of solar all across the United States. But for the past week, there has been more buzz than ever about America’s solar industry because of the decision by President Obama to install solar panels on the White House.
Think about it. Is there any billboard in the world better for your industry than 1600 Pennsylvania Avenue? Not a shot!
In some ways, this is like getting the Good Housekeeping Seal of Approval. We put a bug in President Obama’s ear about installing solar panels on the White House when he first took office in 2009, and we’ve brought it up in every meeting since then. To see this finally happen is not only gratifying, but it also helps to highlight solar as a mainstream source of clean, abundant and affordable energy. 
So I thought it would be a great time to share with you some fun facts about solar:
  • Today, solar generates enough electricity in the United States to power 1.3 million American homes — that’s the equivalent of every home in the state of Connecticut.
  • Since the beginning of 2010, average panel prices have declined by more than 70 percent and average system prices have declined by nearly 50 percent, making solar more affordable than ever for more families and companies.
  • A solar system is installed in the U.S. every four minutes. That breaks down to two panels every second.
  • Right now, more than 30 utility-scale, clean energy solar projects are under construction in the United States — utilizing both CSP and PV technologies.
  • A utility-scale solar power plant can generate as much electricity as a medium-sized, coal-burning power plant — and without the pollution!
  • Total installed solar photovoltaic capacity grew more than 76 percent in 2012 compared to 2011, with growth in all market segments — residential, commercial and utility — making solar one of the fastest-growing industries in America.
  • Solar is by far the nation’s single most abundant renewable energy resource.  NREL estimates that there is enough available rooftop area alone to support 819 terawatt hours of solar energy each year.
  • Over the past five years, polls consistently show that 9 out of 10 Americans support solar and want to see its expanded use in the United States.
  • The Department of Energy Loan Guarantee Program has an approximately 97 percent success rate.
  • Colorado now has enough solar capacity to power nearly 50,000 homes.  If you stacked the panels, they would reach 3 miles into the sky! (Top 10 Solar States)
  • A rapidly-growing solar industry in Maryland has already surpassed the state’s famous crab industry in value. 
  • Hawaii gets a greater percentage of electricity from solar than any other state. 
  • Solar has quadrupled in Massachusetts this year, bolstered by strong solar policies. In fact, the solar industry made more money installing panels than the New England Patriots did selling tickets! 
  • If you include all the usable land (not just rooftops) in Texas, you would have twice the solar potential of any other state.
  • There are more solar businesses in New Jersey than tanning salons.  Think about that for a second. 
  • Arizona installed more utility-scale solar in 2012 than any other state. 
  • California installed more overall solar than any other state in 2012. If California was a nation, it would rank 7th globally in installed PV capacity.
  • And, finally, there are more solar energy workers in California than there are actors; there are more solar energy workers in Texas than there are ranchers; and nationwide, there are more solar energy workers than there are coal miners. (Solar Foundation
I hope that you took some notes.  We’ll have a pop quiz on Monday.  Thanks for all that you do to support solar in America!
Original article:

Thursday, August 15, 2013

Solar Capacity to Double in Next 2.5 Years

If you want to understand why people so often compare deployment trends in solar photovoltaics (PV) to Moore's law in computing, consider this statistic: two-thirds of all solar PV capacity in place worldwide has been installed since January 2011.
Let's put that into perspective. It took nearly four decades to install 50 gigawatts of PV capacity worldwide. But in the last 2 1/2 years, the industry jumped from 50 gigawatts of PV capacity to just over 100 gigawatts. At the same time, global module prices have fallen 62 percent since January 2011.
Even more amazingly, the solar industry is on track to install another 100 gigawatts worldwide by 2015 -- nearly doubling solar capacity in the next 2 1/2 years.
Those statistics and the chart below, courtesy of GTM Research Senior Analyst MJ Shiao, illustrate the exponential growth in the global PV market.
Source: GTM Research
And as Shiao's second chart below shows, the U.S. distributed solar market is on pretty much the same growth trajectory. More than two-thirds of America's distributed PV (everything except for utility-scale projects) has been installed since January 2011. And by 2015, the country's distributed PV market is expected to jump by more than 200 percent.
There are a few key takeaways from these figures.
First, utilities still dismissing solar as inconsequential or "cute" may soon be in for a rude awakening. According to the Solar Market Insight report from GTM Research and SEIA, the national average for residential system prices fell another 18 percent last year; non-residential prices fell 13.3 percent.
The falling cost and price of installation is starting to open up new markets without incentives. As Shayle Kann, vice president of GTM Research, pointed out recently, roughly 3,000 residential solar systems were installed in California without the use of any state incentives in the first quarter of this year. 
"This is emblematic of a sea change in the solar industry, and even more importantly, in the energy industry," wrote Kann.
But this rapid increase in installations won't create challenges for just utilities -- it will also create challenges for the solar industry itself. Since the solar market is still at the beginning of a steep growth curve, it's hard to say whether the business models and technologies we know today are going to be successful in the future.
This will likely mean more bankruptcies and more consolidation. It will also test the reliability of products operating in the field.
Because two-thirds of PV capacity in the field today was only installed in the last couple of years, a majority of the products are still very new. Solar is a multi-decade investment, and there is uncertainty around how new hardware will perform over the long term, explained Shiao.
"We're really at the beginning stages of understanding PV in terms of products in the field, viable business models, and effects on the grid, especially when you consider that PV is being sold many times as a twenty-year asset. Now is the time to look deeper into issues surrounding product reliability, market sustainability and O&M business models."
Original article:

Thursday, July 4, 2013

Solar ups and downs in manufacturing

The Ups and Downs of Solar Industry Optimism, Irrational and Otherwise

Friday, June 21, 2013

Buying Solar Online

Peter Kelly-Detwiler, Contributor
I cover the forces and innovations that shape our energy future.

Solar Universe's On-Line Process Makes Buying Residential Solar Easier

Image: Solar Universe
Several weeks ago I posted a piece on the need to reduce soft costs in the solar industry.  Hard costs are related to the hardware – racks, panels, and inverters.  Soft costs are all of the other ‘stuff’ necessary to get electricity to flow from panels to the grid.  They include customer acquisition, permitting fees, third-party financing fees, installation labor, and permitting-inspection-and-interconnection costs.  And while they may be soft, they are not small.
Last year’s U.S. Department of Energy-sponsored report looking at non-hardware, balance-of-systems costs indicated that these represented about 50% for residential systems and 30-40% for commercial systems.  A large portion of such costs were related to customer acquisition; somewhere around $.67 per watt installed. The U.S. Solar Energy Industries Association, estimates the average residential photovoltaic (PV) installation (Q3 2012) cost of $5.21 per watt.  So these costs are about 13% of the total, and in some cases much higher.
The beauty of a large emerging industry such as solar is that there are so many niches to focus on in driving down costs and improving service.  In solar, much of the emphasis to date has been on the panels.  But now companies are honing their focus on the soft costs and some interesting business models are emerging.  A few weeks ago, I highlighted the efforts of EnergySage, a company with an online platform that lets users obtain multiple apples-to-apples quotes within a short timeframe.  More recently, I had a chance to look at the approach being pioneered by Solar Universe, and to speak with Joe Miller, EVP for Channel and Sales.
The first thing that struck me about Solar Universe is the background of the team: the President and CEO Joseph Bono is a former owner and franchisee of a Quiznos franchise, as well as a software and consulting firm. Joe Miller headed consumer sales and marketing for TiVo.
Joe confirmed that this DNA was part of what makes them different.  “We’ve been in business for about five years and we are taking a franchise approach to the solar industry.  One of the things we thought when investigating the business is that most companies are regional in perspective and there are only a handful of really big players.  For most customers, there is no national brand.  As a consequence, we found an industry ripe for marketing, sophisticated online tools, and aggregation of deal flow.”
“We are seeing an inflexion point with solar now approaching grid parity.  People previously interested in solar were green enthusiasts, but now as the price point moves towards grid parity, we move from solar enthusiast to people trying to make money and insulate themselves from rising energy costs.”
“We can bring in things that can be done well at a big company scale, combined with local entrepreneurs – which is why the franchise model was hatched.  Micro climates create big differences, so does local permitting and packaging, so local knowledge is necessary.”
The company is growing rapidly, doubling in size year over year, and capital-efficient.  To date, they have required only one institutional round of funding from Rockport Capital.  Miller indicates they are in the top 5 in CA as far as solar installations, with the number of offices across the United States expected to total 53 by year’s end.  The franchises must use one of three approved panel manufacturers and two inverters.  This expedites processing and purchasing at scale.  As soon as contracts are signed, the kitted racks, panels, inverters and other hardware are shipped to the franchise office.  This centralized approach reduces the need for franchises to keep inventory or warehouse staff, while bringing installation times to less than 45 days.
“Our goal was to take a complex value proposition and simplify it for customers.  We realized consumers like to shop online.  Every solar consumer is different and consumer apathy hurts us.  We felt the industry was ripe for innovation, since interest in solar was high, but the process of getting to the right answer was labor-intensive, involving a truck roll to the house, a sales pitch, and then a design. And let’s face it: waiting around for the cable guy or a solar company is not on anybody’s top ten list of things to do.”
“Our model is predicated on speed, and the fact that the consumer shopping today wants to shop online, the same way they do for goods and services.  We have proprietary software that allows us to pull up your home online and have a discussion about family, lifestyle, energy usage, where panels will go, what they will look like, and how much power you need to generate. And the price quote is generated in same conversation.“
I was taken on a tour of the site by customer representative Joseph Barghouthi and found the process to be pretty quick.  Once you provide location and zip code, utility tariffs pop up onscreen.  The point of this is to optimize the solar investment within the context of the tariff (the financial implications differ for a time-of-use rate versus a flat rate).   The next step is to jointly look at your roof on a screen shared with the customer sales representative, where he or she draws out the panels on your roof as you watch in real time.
As Joe Miller commented, “There’s something that happens when you engage the customer in the process.  It’s enjoyable, collaborative, and we are seeking a mutually beneficial solution. People can do it at home, from the office, or in the evening. And I think it’s an accelerant.  We can help customers get the right answer quickly and figure out if it can work for them.  And we are not rolling trucks all over the place, which lowers our costs.”
I was impressed.  As the grey shapes emerged on the roof, figures to the right of the screen calculated the square footage represented by these shapes, and the total capacity of the solar arrays.  The software then interacts with PVWatts – a national solar database published by the National Renewable EnergyLaboratory – to calculate the energy output.  This helps determine the total economics, including certain subsidy levels, such as the volume of solar renewable energy certificates  (SRECs) produced in a given year (you typically get one SREC for every 1,000 kilowatthours produced, and they can be quite valuable).
Once those figures are established, the next step is for the system and representative to provide you with costs and different financing options.  If you like what you see, you can choose an option and move on to the electronic docu-sign process and commit to installing panels on the roof.  The options range from no money down to upfront lease payments, to full ownership.  The process can take no longer than fifteen or twenty minutes.
Joe Miller notes, “It’s essentially Silicon Valley meets clean tech, with the consumer in mind. There’s no right or wrong way for consumers to buy, but we want to be able to do it whichever way they choose.  We (our franchisees) can go to the house if you want us to.  Or we can execute a docu-sign process over the phone, with the process from signing to installation of 45 days, versus an average of 5 months for the other top ten players.”

“We have different demographics, and we have value propositions tailored to people at different stages in their lives.  One target customer very important for us are the moms. Very, very often females are in charge of bill pay and budgeting. So for example, if you are a new mom and put on solar on your house, based on average costs, we can show that you’d have over $100,000 of savings for college.”
“Or if you have a 30 year mortgage, again based on averages, you could pay your house off 8-10 years faster.  People approaching retirement may be looking at a fixed income and use solar to get the best mileage out of their savings.  That’s where we see the consumer debate changing.  It used to be green first, economics second.  No longer.”
“Also, since solar is on the outside of the home it’s very viral.  What we find – and we have ways to help stimulate this dynamic – is that neighbors are much more likely to go solar about six months after another person’s installation.  It’s the viral clustering effect (author’s note – the same cluster phenomenon occurs with electric vehicles; the neighbor’s purchase turns an abstract concept into a tangible reality).  Once we do an installation, we do a direct mail program to target the 250 closest homes with a wave of three direct mail messages.  And these don’t include a single picture of solar panels – it’s about lifestyle, benefits, savings, and a smarter way to do this.”
The approach of Solar Universe – and that of somewhat similar competitors such as Sungevity (which also has an online design process) – illustrates the maturity of this industry.  They have cookie-cuttered something that used to be highly variable and one-off, making it simpler and easier for the customer.  With hard costs continuing to fall, and companies such as Solar Universe taking a big bite out of soft costs, the solar energy will continue to become more cost-effective and more commonplace in the years to come.

Monday, June 17, 2013

US Solar Boom

Opportunities and risks in a cost-competitive market

In the first quarter of this year there were 71.3 megawatts of residential solar installed in California’s three investor-owned utility territories, according to our just-released U.S. Solar Market Insight report. Of that total, 13.2 megawatts (18.5 percent) were installed without the support of rebates from the California Solar Initiative (CSI) or any other state-level program.
FIGURE: California PV Installations, Q1 2013 (IOU Territory)

Source: U.S. Solar Market Insight

It would be hard to overstate the significance of this, so I’ll reiterate. In the first three months of this year, around 3,000 residential solar installations were completed in California with no state incentives. These installations did benefit from a number of things: full retail net metering (we’ll come back to this), the federal Investment Tax Credit and accelerated depreciation, and California’s relatively solar-friendly rate structures. But even so, this is emblematic of a sea change in the solar industry and, even more importantly, the energy industry.

Historically, residential solar markets in the U.S. were exclusively driven, and constrained, by state- and utility-level incentives, often in rebate form. When a sufficiently large rebate was introduced, the market reacted, but once rebate funding was depleted, the market disappeared. This served as a de facto cap on residential solar growth, and it is why the California statistic is so significant. If state-level incentives are no longer required, there are 3.5 years of runway before the ITC expires for the market to adapt, expand and mature. Assuming nothing else serves as a major barrier -- and this is a big "if" given net metering battles and the ever-increasing need for project finance -- the sky is the limit.
This trend will only accelerate over the coming years. Residential PV system prices continue to fall. Average system prices reached $4.93/W in Q1 2013 nationally, with some states well below $4.00/W on average. Although this is a far cry from the $6.95/W average cost in Q1 2010, there is plenty of headroom remaining. Even assuming flat prices for modules (which, to be clear, we do not expect), there is around $0.50/W to be saved in customer acquisition costs alone, not to mention all the other “soft costs” in a system. We feel confident in stating that, at least through 2016, prices will continue to fall, and system economics will continue to improve.
Utilities are not blind to this transformation, but their responses vary. Some are working to replace retail net metering with a value of solar tariff, which they argue would more appropriately compensate solar customers for their distributed energy production (this question is the subject of much intense debate that I’ll leave for a later article). Notable examples here would be the California IOUs, APS in Arizona, and CPS Energy in Texas, to differing degrees. Others are steering into the skid and seeking to profit directly by selling, installing and owning their own distributed solar assets. For examples, see Duke Energy,PSE&G, and (perhaps surprisingly) Southern Company.
FIGURE: Utility Distributed Solar Investments to Date

Source: GTM Research

This is no small issue for utilities. There is an increasing body of research and discourse suggesting that distributed energy (including not just solar but also things like combined heat & power, small-scale energy storage, demand response and load management) could be an existential threat to the traditional utility business model. The reasoning is essentially this: how can a utility make a profit if forced to maintain its infrastructure and reliability while bleeding customers?

This leads us to the risks: what could stop the residential solar train in its tracks? First and foremost, net metering. There are a wide variety of potential outcomes for the net metering debates in California and elsewhere, and a number of them could cripple near-term growth. Second, rate design. We at GTM Research have been on a tear recently harping on the importance of rate design in the economics of distributed solar. Solar-unfriendly rates can be just as harmful as net metering caps. Third, the ITC, which is currently in place until 2016, but could at any time be revised or removed by Congress, assuming an omnibus tax bill breaks through congressional gridlock. (Think of that old McDonald’s commercial: “Hey, it could happen.”) Finally, project finance. We estimate that the U.S. residential and commercial solar markets will require roughly $54 billion in project finance between 2013 and 2017. That’s a big number for a market valued at $7.3 billion in 2012.

This is all just to say two things. First, we are on the cusp of an unprecedented shift in the U.S. solar market, and by extension the entire electricity market. Second, there is no guarantee as to which way we head from here. Just be careful not to blink, or you’ll miss it.

Shayle Kann is the Vice President of Research at Greentech Media, where he leads theGTM Research analyst team. For more information on the U.S. Solar Market Insight report, visit

Wednesday, June 12, 2013

Solar Electricity Predictions

Solar cells are unusual in that they were cost-competitive from the get-go. From the Apollo space program to highway signs to lighting for buoys, solar could replace highly expensive power from batteries or other sources and eliminate the need for the construction of electric distribution lines. 
When the Institute for Local Self-Reliance was founded in 1974, the first factory producing solar cells for terrestrial applications had just opened in Gaithersburg, Maryland. The cost of solar power was over $3.00 per kilowatt-hour (kWh), com- pared to $0.03 per kWh for grid electricity. The output from that factory the first year was sufficient to power only a few dozen homes. By the late 1980s, the price of solar was low enough that solar cells were finding their way to second homes and remote cabins off the grid. In 1990, the total installed capacity of solar was 200 megawatts (worldwide, with about 25 percent in the U.S.), sufficient to power 4,000 homes. During the ensuing decade, federal and later state incentives for solar ushered in the era of grid-connected solar. By 1999, grid connected solar projects exceeded non-grid application.
By 2000, sufficient solar cells were installed to power 135,000 homes (with just over 20 percent in the U.S). The cost of solar was $0.50 per kWh, equivalent to an installed cost of approximately $10 per Watt. Since 2000, solar electricity production has grown exponentially. The annual installed solar capacity first exceeded 1 gigawatt (GW = 1,000 MW) in 2002 (globally). 
Electricity Price (Nominal)Cost of Residential Solar v. U.S. Residential Retail Electricity Price (Nominal) By the end of 2010, installed solar capacity in the U.S. alone exceeded 2.5 GW (sufficient to power 400,000 homes) and global capacity was over 40 GW, sufficient to power 8 million homes. Annual solar module production exceeded 30 GW worldwide. As production has increased the cost of solar has fallen. Since 2006, the cost of solar has dropped by 58 percent – 10 percent per year.
Grid connected solar is on the verge of becoming competitive — without incentives — with conventional electricity. In 1974, solar electricity cost more than 100 times the residential retail electricity rate, today the differential is 2 times or less in many communities.
A Grid with Solar Parity
The policy and on-the-ground implications of “solar grid parity” are enormous. Even though solar still generates less than one-tenth of 1 percent of the nation’s electricity, public officials, towns and businesses and households will soon have a newly cost-competitive and widespread energy source to develop their own power supply. Locally produced electricity will offer an unprecedented opportunity to connect electricity production with local jobs and economic development. The opportunity of solar grid parity will also threaten the fundamental nature of a 20th century electricity system. Utilities will have to rethink their role in the electricity network when electricity can be generated by anyone and owned by anyone. No longer will the paradigm of centralized power generation, ownership and distribution make sense when electricity can be economically produced at or near most homes and businesses.
Even the concept of backing up solar power is poised to change, as electric vehicles have begun to enter garages and driveways and parking lots, adding a potentially vast number of tiny backup plants and storage systems that will have to be integrated into the grid system. The nearness of solar grid parity brings urgency to the discussion of electricity policy, from incentives to grid design. Well before any new fossil fuel power plants have passed their infancy, electricity from solar will be cheaper. It means that policies that continue to subsidize a centralized grid and its attendant infrastructure may cost ratepayers for decades. It means that citizens and their elected leaders will have to carefully consider the policies that guide investment in the electricity system.
Solar Grid Parity-definition
This report discusses a nation on the verge of widespread expansion of decentralized electricity generation and on the cusp of a new electricity system that enables more of us to produce the electricity that we consume. We identify the first American cities where solar will be competitive without incentives and estimate the amount of competitive solar that can be generated over the next decade. We discuss the implications of this massive introduction of solar and the urgency of crafting public policy that will support the transition to solar power while maintaining a balanced and reliable grid. We examine the opportunity of redirecting solar incentives — like the 30 percent tax credit — toward new methods of accelerating solar development that can continue to drive down the cost of solar electricity in ways that can fundamentally change our electricity system for the better. 
David Crane quote
This is the first of five parts of our Rooftop Revolution report being published in serial. Download the entire report and see our other resources here.
Original Article Here: