TechPulse 360

Rooftop solar appears to be the way solar energy will proliferate in the U.S.

Big utility-scale farms are hard to finance, tough to permit and slow to build. Rooftop solar is quick to get up and running, and is reaping the benefit of numerous government benefits, including a 30% federal tax credit, accelerated depreciation and various state incentives

Rooftop solar installation are pojected to expand 75 fold to 76 GW by 2020

The result is that the U.S. rooftop market may rapidly steal the lead away from Europe, says entrepreneurial consultant Javier Herrero. Herrero estimates that rooftop solar capacity in the U.S. was 1,110 MW in 2008 (rising almost seven fold in seven years) and could reach 76 GW by 2020.

The big reason is price. The cost of solar panels has fallen substantially in recent years (including 50 percent this year) and will drop to less than 2 cents a KWh well before 2020. With the drop from about 30 cents to under 2 cents, it will compare favorably to coal, which today is between 1 to 4 cents.

Also favoring rooftops is the ease of installation. Some big farms require laying new high-tension wires to bring the power to metropolitan markets. Most rooftop locations already attach to the power grid, making installation easier.

As costs fall, demand will spike. Already venture investors have begun eying the market, and numerous solar companies have become more active with rooftop deals.

Herrero says European governmental incentives aren’t as kind to rooftop installation as American ones. European countries subsidize production regardless of where it is – farm or rooftop. Many state incentives in the U.S. are friendliest to sites that produce about the same amount of electricity before and after. This is a disadvantage to big farms that are often built on undeveloped property where no electricity was previously generated.

In the U.S. as well, some municipalities have matched another advantage several European countries have had, specifically Germany and Spain, by enacting feed-in tariffs. Now several states hope to follow their lead, specifically California.

For the next several years, rooftop installations are likely to drive the U.S. renewables market. And as they draw numerous entrepreneurs into the business, solar power projects, and the annuities they generate, will be considered a good bet.

This entry was posted on Monday, December 7th, 2009 at 2:38 pm and is filed under news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.