solar energy stocks

The solar installations in the United States have reached a milestone with 2 million solar installations. In fact, the number of solar installations in the United States has officially surpassed 2 million, according to the latest data from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA). It is a breakthrough in the solar industry, as it took almost 40 years to install 1 million panels whereas it took only three years since then to reach 2 million. It is estimated that in the next two years the figure would cross 3 million.

However, according to Wood Mackenzie it should have actually taken two years to reach the 2 million installation figure. The prediction is indeed weird as the installation of the same has been underestimated by most of the market analysts. Thus, growth is noteworthy.  There is a vivid explanation of the reason behind the prediction of Wood Mackenzie. The figures that we are talking about stand for the number of individual arrays – arrays on the roofs of homes which though comprise a minority of installed capacity, do make up the large majority of individual projects.

Challenges For Solar Power

For all its momentum, the U.S. solar market has not been without its challenges. Despite the decade of incessant growth feat, the U.S solar market collapsed in the first quarter of 2017. This was as a result of the decline in the residential solar market stemming from the decline of the SolarCity/Tesla. However, the market gained the drive and returned to the level it reached in late 2016.

There are several factors that constrained the growth according to Wood Mackenzie and SEIA. Tesla has acquired SolarCity and had dumped its door-to-door sales. Instead, it initiated sales through stores and online through websites. This resulted in the collapse in solar installation and Tesla’s market share.

Residential installations dropped 15 percent between 2016 and 2017, with Tesla’s share showing the most extreme decline during that period, dropping from 650 megawatts to 352 megawatts.  There also had been a substandard possession by SunEdison which compelled Vivint Solar to pull back its sales efforts resulting in a collapse in installations. Thus, the only company emerging triumphant was Sunrun thereby making it one of the three biggest U.S. residential solar companies not to pull back from the market.

Trying extremely hard to grow with lower prices, Tesla has managed to gain customers online, thereby setting pressure of its counterparts. Success in gaining more customers, that too at lower costs, shall determine the time frame the industry would require to install its next million systems — and at what price. Largely due to the challenges of customer acquisition cost, Wood Mackenzie predicts residential growth at just 3.3 percent in 2019.

Despite This, Solar Is Starting To Shine

According to the forecast by Wood Mackenzie, the United States will reach 3 million solar installations in 2021, and 4 million in 2023.  “The rapid growth in the solar industry has completely reshaped the energy conversation in this country,” said Abigail Ross Hopper, president and CEO of trade group SEIA. “This $17 billion industry is on track to double again in five years, and we believe that the 2020s will be the decade that solar becomes the dominant new form of energy generation.”

Looking at a bigger picture, the decline in the costs for lithium-ion batteries and a switch to time-of-use rates, the residential solar companies have started making provisions storage systems along with solar systems. This makes storage a prerequisite as one penetrates deep in key markets.

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