Solar energy began this decade with hope.
Reports in January showed that it would have a banner 2020, growing in capacity faster than natural gas or that aging giant, coal. At the start of this year, the U.S. Energy Information Administration predicted that solar, along with wind, would represent more than three-fourths of all new energy added to America’s ever-increasing grid network.
That was then. What does the future of solar energy look like amidst the coronavirus crisis?
“It’s not a statistical fluke."
Scott Hinson, the chief technology officer at nonprofit clean-energy-research firm Pecan Street, tells Inverse that he has a “cloudy crystal ball” at the moment, which is understandable. What stands out to Hinson is the clear-cut behavioral change that he's seen in energy trends.
“Folks are just sleeping later. Homes are getting to a slower rolling start. It used to be houses started to jump alive around 5:30 in the morning, and then the power consumption would jump alive by 8 in the morning, and then taper off as people went to work. These days, it’s really not getting started until 6:30, 7. It’s not fully going until 10.”
While offices are shut down, Hinson says “it’s not a statistical fluke. People are just using more power at home.” These changes have been able to scramble what’s known in solar circles as the “duck curve,” which traditionally “shows the difference in electricity demand and the amount of available solar energy throughout the day,” according to the Department of Energy. Duck curves have long set the standard for how solar power is used, but as the weather heats up in places like Texas and Arizona, air conditioning use will rapidly increase.
The duck curve highlights one problem that solar energy has long struggled with: over-generation, or too much power when it’s not needed. Unlike, say, coal, it’s impossible to control how much sunshine is beaming down from space on any given day. And unlike coal or wind or any other form of energy, sunbeams hit solar panels all at once. It’s all or nothing in terms of generation, which can end up wasting money.
heSo the temporary shattering of the duck curve “bodes well for solar,” Hinson says. “If it’s being used, all of the potential drawbacks are lessened.”
Looking down the road, Hinton sees a few potential drawbacks: fossil fuels could become temporarily cheaper, but Hinton doesn’t expect that to become permanent. "I just don’t," he says. In fact, as recent news out of West Virginia shows, electricity prices have become so cheap that at least one coal company has been forced to declare bankruptcy. Projects will likely pause and deals will likely slow during this hazy fog, but Hinton doesn’t see a radical challenge to solar’s standing in the works.
Solar energy, once burgeoning technology, has become an integral part of the country’s power grid.
While coronavirus won’t stop the momentum of solar energy, the energy crisis could upend the delicate balance between its two divisions: utility-scale and rooftop.
If there isn’t government intervention, some economists fear what’s called a “utility death spiral,” where local and state governments struggle to finance utility-scale solar -- exactly the type of large, renewable projects needed to fight climate change.
However, rooftop solar could face a very different future.
James Bushnell, a professor in the Department of Economics at UC Davis, tells Inverse that the economy on rooftop solar was already in a precarious position.
"We would hardly be building any rooftop solar if there weren’t pricing anomalies in the ways we compensate owners of rooftop solar,” like tax credits, Bushnell says.
Rooftop solar users are typically “behind the meter,” which means that they’re not counted toward your electric bill, because they don’t interact with the electric grid. It’s great for users, who start to save money after their initial purpose.
“Before five years ago, we always used to think of the middle of the day as the peak, and the evenings as the off-peak,” he says, referring to when energy is in demand. This is how we traditionally imagine an energy cycle, with most of it being consumed during the day in offices and businesses, while less is used at night. This cycle was often reflected in billing.
But solar energy changed the thinking about electricity demand.
“Ever since the massive influx of solar, at least what we’ve seen in California over the past six years, the logic has flipped. Off-peak now is dark, because we have so much solar hitting the system, it more than compensates for the slightly higher levels of demand hitting the system.” In states with heavy sunshine and extensive solar use, the energy becomes ridiculously cheap.
If more residential and business electricity users decide to increase their energy independence as an effect from coronavirus, rooftop solar will see heavy investment.
There are a couple of reasons something like this could happen: the pandemic could lower electricity prices to the extent that rooftop solar prices drop alongside them, a government (federal or state) could offer tax incentives for people to start adopting solar, and the current rush on luxury underground bunkers with off-the-grid energy could continue — so far, a company that builds these bunkers has seen sales go up 400 percent in 2020.
There’s precedent, too. In 2014, cheap solar drove Germany into a utility death spiral, with falling prices and rapidly shrinking profits. It all caused what Peter Terium, chief executive of RWE, Germany’s-then second-largest utility, called “the worst structural crisis in the history of energy supply.”
It’s fair to say that coronavirus could turn out considerably worse. The crystal ball is still hazy, but rooftop solar could move in any number of directions: there’s an over-popularizing death spiral, and then there’s the exact opposite jobs in the sector could continue to disappear, as the majority of industry jobs lost amidst coronavirus deal with residential.
The New Future of Solar Panels
One possibility for the future, if rooftop solar starts to fade away: community solar. A third option between utility-scale and residential, consumer solar advisor EnergySage says that the “primary purpose of community solar is to allow members of a community the opportunity to share the benefits of solar power, even if members cannot or prefer not to install solar panels on their property.
There are two models: outright ownership and subscriptions, the latter of which could fit right in with the burgeoning Netflix/Spotify/Patreon-ification of the world. If you’re already paying a premium for your podcasts and TV shows, why not pay in a similar fashion? EnergySage notes that it’s “akin to signing up for a green power program, except that instead of paying a premium for clean electricity, participants typically pay a lower price for their electricity.”
Kiran Bhatraju, founder and CEO of community solar company Arcadia, tells GreenTechMedia that “for the customer, when you're choosing rooftop solar, you have to make a choice [between] buying and outlaying a lot of cash [and] leasing or doing a loan and signing up for a long-term debt obligation? The way we've structured community solar, you don't have to pay anything upfront.”
It needn’t stop there: charitable giving has been bursting during coronavirus, and that could extend to community solar. Imagine a neighborhood rallying to save a treasured restaurant or bookstore by adding them to their communal solar project, sparing them electric bills while keeping the grid running.
Hazy crystal ball or not, that future sounds pretty nice, all things considered.
New Future is an occasional series from Inverse.