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Halfway through the Energy Department’s decade-long SunShot Initiative, today we released a series of reports showing how the solar industry has progressed in the past five years, while looking forward to the challenges and opportunities it now faces. The On the Path to SunShot study series, developed with our national labs, examines the state of the solar industry, which has grown significantly in the last five years and is 70% of the way toward our goal to make solar fully cost-competitive with traditional forms of energy without incentives. Thanks to sustained innovation across all levels of the industry—from system-level improvements, to streamlining access to solar, and new business models across sectors—we are confident that the U.S. solar energy industry can achieve the SunShot goals by the end of the decade, with additional cost reductions and even greater solar energy deployment levels achievable in the decades to come.
One key insight drawn from these reports is that driving down the cost of solar has shifted away from focusing on the hardware and various processes required to sell, install, and interconnect a system. The reports move toward a new measurement of success for the industry: improving the value of solar. This captures the idea that some kilowatt hours of solar electricity may be more valuable than others and more useful to some stakeholders than to others. For example, solar electricity might have one set of costs and benefits not only to a homeowner purchasing solar for their roof, but also a utility managing electricity load on the grid and to the broader society seeking to reduce the climate impacts of our energy supply.
Solar energy’s value is already clear from the perspective of society. The On the Path to SunShot study includes a first-of-its-kind analysis of the value of solar to our environment, our climate, and to public health. Achieving the SunShot targets would reduce electric power-sector greenhouse gas emissions by 10% between 2015 and 2050 as greater levels of solar are installed, purely based on price competitiveness. Compared with conventional fuels, solar produces far lower lifecycle levels of greenhouse gas emissions and harmful pollutants, including fine particular matter, sulfur dioxide, and nitrogen oxides. By displacing incumbent generation, solar could produce up to $426 billion in savings from future health and environmental damages and save more than 25,000 lives.
From a utility perspective, the value of solar increases when it can be used throughout the day. Operators, who must balance energy generation and consumption on the grid, will benefit from grid flexibility solutions including integration of energy storage; these innovations—which SunShot is advancing through our research and development programs—could enable 25% or higher levels of photovoltaics (PV) on the grid at low cost. The reports also introduce other low-hanging fruit: simply expanding the use of already commercially available advanced inverters could more than double the existing capacity of utilities to integrate solar on existing distribution circuits. By optimizing the flexibility of solar, these solutions will increase solar’s value to the grid and lower its cost.
Homeowners would most benefit from an “easy button” for solar—in other words, a way to easily get started through financing. Financial innovations that make it simple to go solar—similar to buying a big appliance for your home—could cut the cost of solar energy for customers and businesses by 30%-60%. With the development of a larger, more mature solar industry, financial transparency and investor confidence will increase, bringing with it simpler, lower-cost financing methods. In addition, real estate appraisers and other home professionals will be able to quickly and easily assess the impact of solar on a home’s value, just as they do with state-of-the-art appliances or other home features.
The solar industry made huge strides in the last five years, and solar is expected to continue its important role in the nation’s energy mix. Although it still only represents about 1% of total electricity consumed in the nation, solar accounted for more than 30% of the new generation brought online in 2015. Achieving the SunShot targets would mean that by 2030, solar could account for 14% of the nation’s electricity needs and 27% by 2050.
Armed with these reports, SunShot and the industry at large can work toward achieving our cost reduction targets through 2020, but we’re not stopping there. As we reflect on where we have been, we also look forward to where we are going. Over the next few months, SunShot will analyze the road ahead and set new goals for 2030. Stay tuned. Read the On the Path to SunShot study and discover more about how SunShot is moving the solar industry forward.