US Residential Solar Market
Several factors contribute to the increase in customer demand. As technology and innovation increase, solar systems are becoming smarter and more interactive. These two trends are already emerging and are expected to keep doing so within the next few years.
Increased Customer Demand
- The residential sector in the solar industry is seeing an increase in rooftop installation and the subsequent adoption of solar photovoltaic (PV). This is primarily being driven by the expected savings, climate change mitigation, and the alternative source of energy within the home. Over the past six years, the cost of solar PV has declined by about 45% in California. This is due to technological improvements and increased efficiencies.
- In 2019, Wood Mackenzie forecast that there would be a 23% annual growth in solar installations. However, in the same year, the forecast for the next five was adjusted to represent faster growth. In the next five years, the PV capacity in the US is expected to double. By 2021, installations are expected to reach 20.1 GWDC.
- The decline in prices and the improvements in the competitiveness of this industry have already spurred smaller solar markets such as Idaho, Wyoming, New Mexico, and Iowa to witness record growth in the residential segment of the solar industry.
- Families in America are increasingly using solar energy, making it a better alternative. According to the president and CEO of SEIA, Abigail Ross Hopper, the companies in this industry are ready to deliver and meet this expectation. In the wake of the COVID-19 pandemic, utility customers have had to endure delayed services, leaving some in the dark.
- Singlepoint, Inc. has seen a 190% increase in revenue between 2018 and 2019. This increase is expected to continue in the 2020s. It is also important to note that this company has acquired Direct Solar of America, which increases its customer reach and impact.
- The main gauge in determining the efficiency and value of a brand in this industry will continue to be messaging and word-of-mouth as there are no standard industry metrics in the energy storage industry. Although this may create a barrier for new startups, with top brands being the leading customer choice.
- In order to enhance the customer experience, the data reported will continue to be increasingly simplified to curb any irrelevant data, in order to mitigate alienating the mainstream homeowner.
- Vivint Solar focuses on creating a great customer experience. It enhances its messaging around clean, renewable energy that "Puts People First." Vivint Solar has set up a new Help Center that attempts to provide the best support to its customers. Since Vivint Solar launched this center, the educational articles have had the most traffic: "Getting Started with Solar," and "How to Maximize Savings While Using a Solar Energy System."
Smarter and Interactive
- Smart solar will be the next generation system, increasing consumer interaction with online or smartphone-available features such as intelligent inverters, demand mitigation devices, and high-efficiency AC systems. This system will empower the client to enhance and manage the use of solar-generated energy within the home. As investments increase, the development of technologies in this industry is expected to keep advancing.
- As consumer patterns evolve, complementary technologies will continue to expand the use of solar energy in residential areas. All this is shifting both supply and demand patterns as people have increased control over how they consume energy.
- In the next few years, utilities will increasingly need the consumer's assistance in managing their own electrical demand. By using solar, consumers can manage how they use energy, minimizing the use of short-term excessive energy consumption. This is a part of the smart solar system which will allow consumers to have access to the savings features on demand.
- Homeowners are increasingly installing PV systems to substitute utility usage by providing backup power and reducing bills. As a result, net-metering will replace time-of-use rates. This trend is already evident in California as well as other states in the Northeast.