The reign of fossil fuels has long been over, but many carbon producers just didn’t get the memo on time.
Now they have.
The future clearly belongs to renewable energies, but which one will take the lead? Despite its early promise, solar energy is still behind wind and hydro. But now, the tide is turning thanks to improving technology, government incentives, and many other factors.
Below are the top five trends that are transforming the energy space:
1. Traditional energy companies are investing more in renewable energy
The first significant trend caught many players off-guard. While it is not a particularly new development, the rate at which the world’s largest oil producers are now investing in renewables is astounding.
In the past couple of years, Total made a concerted effort to double its global renewable energy capacity from 3 gigawatts (G) in 2019 to 6 G.W. in 2020. As pointed out by The Motley Fool, that can power 1.14 million American homes. A lot of that is being achieved through solar power via its majority stake in SunPower.
A survey by DNV GL found that 57% of senior oil and gas officials said their companies would increase their investments in renewable energy, which is in line with what Total is doing.
While skeptics dismiss this as oil companies trying to salve their conscience or making changes due to the crash in oil price, it still leads to the desired result – a cleaner, healthier world.
2. Solar is becoming more affordable
Solar energy has long been the preferred choice of power supply for most households, but the high installation costs have kept people away. Even though 90% of Americans support the use of solar energy, only 6% of homeowners have installed panels in their homes.
However, the number of installations increased significantly over the past year. The U.S. Energy Information Administration (EIA) forecasted that between 2019-2021, small-scale solar generating capacity would add 9 G.W. to the total U.S. consumption. This represents a 44% increase.
Part of the reason for the jump is that solar power is becoming more affordable. Over the past decade, the price of solar equipment has dropped by 89%. Besides the drastic dip, government incentives like the Federal Tax Credit for solar photovoltaics have made it even cheaper to install.
If the price continues to decrease (as many predict), the solar industry in the U.S. could quadruple by 2030.
3. Changing government legislation
The new administration has promoted itself as pro-renewable energy and has launched some daring plans to prove it. President Joe Biden’s infrastructure plan will require all utilities to use a specific amount of solar, wind, and other renewables.
While most states already use renewable energy as part of their service delivery to businesses and residential users, this change will enforce it all over the country and will gradually increase over the next fifteen years.
The project will require hundreds of billions of dollars of tax dollars invested in the electricity industry, including electric vehicles. Besides this effort, States also have their own renewable energy goals.
California famously became the first state to mandate that most new buildings must have a solar system, starting in 2020. Environment America is pushing for legislation that will extend a similar proposal to ten other states.
If they are successful, it will only be a matter of time before others follow.
4. The invention of solar products
One of the most considerable and most valuable changes has been the growing number of solar-powered products.
Homeowners who can’t afford to install a complete kit for their house can reduce their energy costs by connecting devices to their solar panel. As a result, products such as solar-powered air conditioners, outdoor lights, and even generators are becoming more popular.
Other alternatives include solar-powered backpacks, cookers, and smartphone chargers. All of these draw even more attention to the need for and usefulness of solar power.
In the case of larger equipment like the solar-powered air conditioner, this is a stepping stone towards off-grid living, as A.C. costs constitute a significant contributor to electricity bills.
The panels, inverters, and batteries are similar to what you would need for a home, so buyers might also be able to get a tax credit.
5. Energy Storage
Finally, we have a chance the market has been waiting for a very long time. One of the major challenges with solar power has been storage. While solar panels may be relatively inexpensive, the batteries cost a fortune.
The good news now is that battery prices are at an all-time low, having reduced by almost 80% in the past few years, and should fall another 37% by 2023, according to BloombergNEF (BNEF).
What’s more, BNEF believes that as lithium-ion battery packs become more affordable, the penetration rate for renewables could reach as high as 80% in some countries.
Improved energy storage also means solar users wanting to sell electricity back to the grid will be able to do so. Talk about killing two bills with one battery!
New Dawn for Solar Power
The Paris Agreement, alongside other policies set forth by corporations and governments, has caused significant investments into R&D. The results have been outstanding, albeit not yet practical.
We can expect to see more mainstream adoption of floating photovoltaics, anti-solar panels, and lots of other exciting new technology. Until then, we can celebrate that the market is at least moving in the right direction.
Author bio: Melanie Mavery is an aspiring HVAC technician who is fascinated by the trends and opportunities in the HVAC industry. She spends most of her day writing content on home improvement topics and outreaching to prospects. She’s always looking for ways to support HVACs!