Solar Energy Outlook for 2017 – Colorado and Beyond

Many of us here at BriteStreet are wondering, “Where will ‘The Solar Coaster’ take us this year?” Let’s take a quick look back at 2016 before looking forward to 2017.

2016 in Review: Xcel rate case settled, ITC extended

The solar coaster crested two major climbs last year; one at the state level with Xcel Energy’s rate case, and one at the federal level with the extension of the 30% federal investment tax credit (ITC).

The rate case was a settlement between Xcel Energy, Colorado’s largest utility, and many other stakeholders including solar companies including BriteStreet. The settlement had been in negotiation ever since Xcel proposed a “net metering fee” and then a “grid fee,” both of which would have penalized customers who installed solar by charging them additional fees to connect to the grid. Xcel was ultimately not allowed to introduce these proposed new fees that would have damaged the solar industry.

The federal investment tax credit is a provision that allows customers who purchase solar to reduce their income tax by 30% of the total system cost. The credit was created by the Energy Policy Act of 2005, and was set to expire in 2016. However at the end of 2015 it was extended until 2023.

If the rate case had been settled differently and the tax credit had expired in 2016, the solar coaster might have gone off the rails in 2017. Now that the rate case is settled favorably and the tax credit extension is written into law, solar is back on track in Colorado and 2017 should be a fun ride. This case also sets a great precedent, as many other states and utilities are currently evaluating alternatives to net metering.

Xcel Energy’s 2017 Renewable Energy Plan

The rate case settlement also modified Xcel’s 2017 Renewable Energy Plan to allow for the expansion of clean energy in Colorado. The settlement adds 225 megawatts of solar capacity to Xcel’s Solar*Rewards program from 2017-2019, with 123 megawatts slated to come from small-scale solar projects. The deal also requests the development of up to 105 megawatts of community solar gardens over the same three-year period, with an additional 12-megawatt carve-out for low-income customers for a maximum of 342 megawatts of new solar between 2017 and 2019. This means Colorado will install more solar than ever before, and possibly move up within the top 10 states in the US for solar.

State Level Energy Policy

Many people expected the Colorado Senate to flip to Democrats in an anticipated Clinton-driven progressive wave that would have eliminated the Republicans’ one seat majority, giving the Democrats control of the Governor’s office and both legislative chambers. Had this happened, Democratic Governor Hickenlooper, who has been criticized by progressives in the past for supporting oil & gas over renewables, would have faced pressure from his own party to promote solar. Hickenlooper and his fellow Democrats still control the offices dealing with energy and environmental policy, while the legislature’s GOP Senate and Democratic House yield stalemate. A divided legislature will likely result in many killed bills proposed by either side. Of course, this says nothing of Hickenlooper’s possible use of an executive order. Last year Hickenlooper introduced a draft executive order that directs Colorado’s state agencies to implement policies to achieve a minimum 25 percent reduction in carbon dioxide emissions from 2012 levels in 2025. It may still be possible that the Governor will issue the draft formally in 2017. When I heard him speak last October at a GRID Alternatives event that BriteStreet sponsored, he said he was still determining whether or not to push forward the executive order. If such an executive order is issued, the legislature may challenge it or refuse to enforce it. Even without support from energy policy at the state level, solar is expected to boom again this year in Colorado. BriteStreet is poised to install more solar in Colorado than we have ever before, as well as expanding our workforce in Colorado.

National Level

President elect Donald Trump didn’t give any specifics about what his administration would do to help solar energy when he was running for president, so it is impossible to predict at this time what the new president means for the industry. One thing we do know is that politicians love adding jobs more than they love kissing babies, and the solar industry employs a lot of people. Even if Trump is a climate change denier, he can’t overlook the fact that solar promotes more job growth in 2017 than any other form of energy. It is unlikely he would do anything brash to jeopardize those jobs, especially since the only federal incentive is the investment tax credit, which was implemented during a Republican presidency in 2005 and then extended just over a year ago by a Republican controlled congress. Even if Trump does nothing to support solar, the industry will remain in rapid growth mode due to the extension of the investment tax credit coupled with plummeting equipment prices. BriteStreet is prepared to continue meeting increased demand for solar in 2017 no matter who resides at 1600 Pennsylvania Avenue.

Overall Market Trends

The big story internationally is the major decrease in equipment prices. When GTM Research predicted in 2013 that solar panel prices would drop from 75 cents per watt to 36 cents per watt by 2017, everyone thought they were nuts. Now, it seems they were correct. The price of solar panels is projected to reach 35 cents per watt in the coming months, a 48% drop in just 4 years. Solar has become increasingly cost competitive with other sources of energy, in some cases making it less expensive than fossil fuels. With the cost of solar equipment decreasing, the pace of installations continues increasing. If you’re considering solar, now is the best time ever to pursue installing a system. We at BriteStreet are confident that 2017 will be another growth year for solar energy in Colorado, as well as the rest of the world.

Increased Efficiency

A few years ago a standard efficiency panel converted 14% of the sunlight that it collected to electricity. 2017 will see a shift in “standard efficiency” into the 18-20% range. Trina solar is one of the manufacturers pushing the limits of efficiency, having recently announced a new 22.6% efficient panel. BriteStreet offers many high efficiency panels already and we look forward to providing even more efficient panels in 2017.

Energy Storage

The price of batteries is also coming down in 2017, although not as dramatically as panel pricing is. Beyond cost, additional factors will drive the growth of energy storage in 2017. Utility policies such as the rate case in Colorado and tiered pricing or “peak rates” such as in California are leading to increased battery storage. Look for batteries to finally become a big factor in solar in 2017. BriteStreet will be increasing our energy storage offerings as demand increases.

Offsite Solar

Community solar will continue making great strides in 2017, and so will offsite commercial and industrial arrays. 2017 will be the biggest year yet for large scale solar. BriteStreet will be installing many commercial and industrial solar arrays for community solar gardens and offsite commercial arrays.

Tariff Programs

At the end of 2016 Massachusetts proposed a new solar incentive using a tariff structure. The program will include a 15-20 year fixed rate that applies to all electric companies across Massachusetts. The program is being touted as ensuring more predictability in the incentive level, and greater cost certainty to ratepayers. There could be a number of states migrating toward a similar model in 2017.

Grid Capacity?

In some areas of the country such as parts of Hawaii and California, solar has become so ubiquitous that the grid in those areas literally can’t handle the amount of electricity being produced by people’s solar panels (grid capacity). Several states are considering the impact of this phenomenon as solar proliferates. Energy storage, community solar, and upgrades to the grid are solutions to grid capacity that will get increased attention in 2017.

Solar Decathlon

A big event coming to Colorado in 2017 is the Solar Decathlon. Every 3 years the Department of Energy holds a student competition that challenges teams to build the best solar powered house. CU won the first two Solar Decathlon competitions in 2002 and 2005. The 2017 competition will be held in October near a new development close to Denver International Airport. The development is positioned to become a national model for sustainable building. BriteStreet will be there!

Okay, that’s enough for now. In conclusion, it’s going to be another big year in solar, and BriteStreet is ready!