Solar predictions 2019 and Beyond

From my vantage point, 2018 was the year of getting back to basics. Total GW’s installed was down, but it did bring out the drive in many of us and our companies to adjust strategy and work harder. Q2 of 2017 brought new tariff threats and had companies figuring out how to best address the financial cost. 

Manufacturers changed contracts to fit the tariff probabilities. EPC’s, investors, IPP’s, and throughout the project development and construction chain had to decide how they would address the situation. Most of the large players went with purchasing and hoarding as much stock as they could get for upcoming projects, they expected completed in 2018. Companies made the purchasing decision ahead of 2018 in case of a worse tariff decision than imposed.

Stockpiling for 2018

With 2017 adding another threat of module tariff, companies invested in as many modules they felt comfortable they would use in 2018. What was not considered is the effect on module purchases in 2018 and the mood of the industry. The Trump administrations didn’t help with their coal first mentality. What does that mean for 2019 and beyond?

Winds of Politics

In the political news, there are comments about the Democrats going strong towards renewable energy to curb climate change. The 2020 election could be a memorandum on renewables. For 2019 we still have two years left on the ITC. The ITC is allowing many companies to focus on completing more 2019 project and increasing revenue and profits. Also, actively preparing for 2020 projects and planning to make the required 5% investment for projects completed after 2020. The 5% investment will need to happen before the end of 2020.

Already 2019 is a strong year, although there are pricing pressures from module scarcity which is causing many companies to have a minimum 3-year plan.  Modules contracts are closing for that same 3-year period. There still are market worries partially created by a continues tariff threat. My belief is we are on the verge of a change at the federal administrative level. Tariffs will get reduced, and ITC continues past the 2020 deadline. 

Expanding ITC

An expanded ITC will not take place until the latter part of 2020 but may come into effect by 2021.  This increase in the ITC could be reflected in the 2021 years budget as part of a fiscal stimulus package. This new administration will do much more than President Obama did who was cut short because of Solyndra. The political momentum has picked up, and both parties are considering working together for the future of the United States as an energy power.

All the indicators show me that we are only a few years from the first quantum leap in affordability for the household. Investment by the average household injects into play the first quantum leap that takes place for the solar industry. Based on the financial proposition it is more cost effective to have solar then, not to have. A quantum leap is one of the positive side effects of the industry’s efforts.  

Quantum leap

I have been talking about the coming of a quantum leap for the last five years. Now the signs are clear, and the horizon is near. States have cities, towns, and villages buying into solar as they see the value of owning energy. The momentum keeps picking up even though our federal government attempts to hold renewable energy down. 

Although oil and coal companies are funding the Senators and House Representatives reelection campaigns and special interest groups, pour money into reelection campaigns. The strategy of Representatives for sale through special interest influencing policy slows down and the growth of renewables increases. 

Even with all the push against solar one thing chimes most true, the solar engine keeps pushing forward. The solar skies look clear with an unbelievable growth readying itself to burst into full capacity. Included are all of the technical components, Developers, EPC’s, contractors, and the power companies.

In closing

California is continuing the lead by making it mandatory for all new homes to have solar. Although California is guiding the way, New York sees the future the same. Governor Cuomo from New York wants the state 100% carbon-neutral by 2040 to save money and slow climate change. As more states have a value proposition where solar makes financial sense, companies will enter these new markets and build projects.