From pv magazine USA
Residential solar has been navigating difficult waters over the past year, as high interest rates squeeze the savings made available to homeowners. Policy changes, like net energy metering (NEM) 3.0 in California, are pressuring the value proposition to rooftop solar customers, crushing demand in recent months.
Major publicly traded solar stocks are down over 75% over the past year, and demand in major markets like California has peeled back 40% to 80%, with the damage from NEM 3.0 not fully evaluated yet.
While California has long served as a model for solar success, that may no longer hold true. In its Roundtables US 2023 live event, pv magazine USA invited a panel of four distributed solar and energy storage experts to offer their view of how the market is responding to policy changes and offered some lessons from California’s recent struggles.
The participants included Aurora Solar Chief Revenue Officer Carina Brockl, Sonnen Chairman and CEO Blake Richetta, Sunrun Vice President Of Public Policy Walker Wright, and California Solar and Storage Association (CALSSA) Executive Director Bernadette del Chiaro.
Wright began the conversation acknowledging that net metering was instrumental in kickstarting the market in California, which represents roughly 50% of the United States rooftop solar market. It, along with federal policy and California state incentives, was what made rooftop solar such a strong customer value proposition.
“The largest renewable energy market in California is distributed [solar],” said del Chiaro. “And yet what we have just done is not just a seismic shift … we are looking at an 80% drop in sales under the new NBT tariff. The months ahead are looking dimmer, not brighter.”
While residential solar is currently being hammered by headwinds, there are some forces that could counteract the market retraction. Brockl said though inflation has increased steadily, electricity prices have increased even more, and in some cases at double the rate of inflation. This makes the customer proposition to rooftop solar customers slightly more appealing as a hedge to rising utility rates, even if day one savings are razor-thin or even in the negative.
Richetta, representing energy storage provider Sonnen, expressed more optimism than his fellow panelists. Sonnen has its roots in Germany, which experienced a similar market contraction in rooftop solar when it phased out its feed-in tariff policy that supported the creation of the market. Since then, the market has recovered, and Germany has among the highest rooftop solar penetration rates in the world.
“There was a market need to harness solar and harmonize it with grid operations… and to transform an intermittent form of generation to something that is firm and dispatchable,” said Richetta.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
We’re in NE FL and ready for rooftop solar. However, we won’t buy anything until good solid state batteries and a switch so we can use our PV in outages are available with it. We’ve had up to a week with no power so net metering without a switch over to our PV is a NO GO.
Such switches have existed for many years in CA, where they are called Gateways. They are automatic based on user settings. Not sure why you are waiting for unproven solid state batteries. How many more years do you want to postpone savings? Our Tesla Powerwalls have worked great for several years, having stored and released 31 MWh so far. I have an app on my phone that monitors usage and can remotely change settings. We have handled a few power outages without a flicker. I get a text on my phone when the grid is down.
There are several battery solutions available that will automatically switch over. However, these make more sense for backup than daily usage, in my opinion. This is where California’s PUC and governor (Gavin Newsom) have fallen asleep. Batteries are still very expensive and don’t really have that great a lifespan. and, at best, that lifespan isn’t really proven yet. Some products such as the Tesla Powerwall seem decent, but I personally am staying away from them. I would have to pay upwards of 18K to install a decent sized system. This is what our PUC wants under the new NEM laws. But if you live in a location with decent power, you will NEVER make that money back. In 10 years your warranty will expire and you may have bad batteries that need to be replaced for what? Maybe 15K? That is an *expensive* backup system. You are better off getting a greenhouse belching generator (except that they’ve outlawed these). Energy arbitrage where you store power from “cheap” rates at night and feed it back into the grid during “expensive” day rates will not come close to generating 18K over that 10 year life, at least as far as I can ascertain.
So, if you have a need for backup power (which it sounds is the case), then a battery backup system makes a lot of sense. They may be expensive, but they work great. But if you have decent power then I think a daytime only backup (basically a transfer switch to disconnect you from the grid and then grid forming inverters to generate your local-use power) system is probably more logical.
Solar and wind provide a large portion of our energy in California. The storage issue is simple to manage and maintain the grid from peak energy to storing energy. The fact is in the next 25 years coal and gas power plants need to close. Otherwise, our children won’t have a planet to live on by 2060. Climate change is very real! Every year is breaking heat and storm records. This is not over active imagination, it is reality. Buy an EV, buy Solar panels or shingles with battery backup, buy the new Source Solar water producing panels.
Sure, buy all that with whose money?
Very good and valuable articles
Germany was an exception after Russian gas was turned off and they had an energy production panic it only made sense for people to rush out and buy solar systems. What doesn’t make any sense is selling solar systems in the United States to customers where the economics don’t work (losing money) and the scammers that lie to people to generate sales make things worse. Also depending on subsidies that can be taken away isn’t a viable plan. What is needed are lower cost hardware and installation that results in actual savings for customers or a death of the industry.
The pv crash in Germany, they were talking about was in 2010. The 20 year guaranteed feed in tariff dropped significantly faster than the building costs of solar, due to a law change, that was basically there to kill PV. So nobody wanted it anymore. Interestingly the payout was around 20 cents before the rule change and dropped to 12 and later under 10 cents. Looks like California was still paying on average over 25 cents per kwh of electricity send to the grid in 2022, with a guarantee for 20 years.
Currently the feed in tariff in Germany guarantees around 8 cent, while you save around 30 cents on self consumed pv production. People are building, because the construction costs are cheap enough for it to still be profitable.
California clearly paid too much for it, since you can currently buy 10 kwp of pv modules plus an inverter for $3000. While people pay 25k plus for a rooftop installation.
Why don’t you try Chinese products? Now Tesla also uses Chinese lithium iron phosphate batteries, and the price is only half of Tesla or American and European brands.
As a taxpayer, I have subsidized California solar installations for years. It is good to see movement towards solar paying its own way. Not there yet, but some day solar just might not be a boondoggle anymore.
The cost to instal a 20 Kw solar roof top is ×4 times in US, compared to India. US concerned authorities needs to seriously look into this cost difference, which is going to discourage solar expansion.
What you may not realize, however, is that the cost to install and service a solar system is not insignificant. You cannot expect people to install something on their house when the payback is 15 years *IF* nothing goes wrong. In California we subsidize all sorts of things on a social level. You should think of solar as nothing more than that… a long term agenda. And as demand increases due to the Newsom/PUC mandate of electric everything, we will have more and more power outages given that traditional generation is not being built and wiring is not being upgraded. So all of that solar subsidy starts to become very beneficial to *everyone* if we have micro generators all over the State.
I think you are looking at the benefits in much too narrow a way, Jubal. Yes, some may end up with “lower bills” (debatable when you look at the costs, but let’s roll with that assumption anyhow), but PGE/SCE can continue to operate versus turning off your lights. Further, they don’t have to charge you extra money for upgrading lines and building new plants. That, in the end, is the benefit of those subsidizes which are, by the way, now pretty much defunct (the whole basis of the article above).
Solar cost way more than burning wood to heat your home and propane to generate electricity. Wood decaying in the woods and termites put off more methane than burning for heating, science has proven that fact.
What the electric companies should do is covert their operations to solar and bear the brunt of the expense, if this is such an important agenda. Why am I putting ugly panels on my house when solar farms can be created and every customer gets the “benefits” of clean energy.
Solar and wind is not about saving the planet it’s about rewarding politicians.
When you artificially support a certain market and then remove said monies, this is always the end result. If you allow the free market to take place and don’t have government interference, the graph will always show a steady increase. When you force everyone to start using electricity over current, viable options, instead of natural saturation and penetration, you always get unrealistic bubbles and crashes.
You mean like ending all the subsidies to the oil and gas industries?? Could they compete
We should consider moving under the ground. Solar is fine but it is toxic now and only getting worse by the decade. Oops. Too late. The modern giants and USA secret deep state, military industrial complex have Screwed us all. Humm. I wonder where they are? Hint: UG. With prophesy of the end of the world as We know it at hand. Just wanted others to know all this. I too choose to stay positive. Yes. Solar equiped underground domiciles is where We are headed. This government needs to get quashed along with cia FBI,DOJ,SD,Navy etc…
That might work in Cali,but NOT in thee mid North West……..
Well, apparently it isn’t even working very well in California anymore. The PUC authored, and governor Newsom signed, a connection package (NEM3.0) that has effectively killed future solar installations in the State. That was the general basis of the article above. The dream of self generation goals have pretty well been squashed. Sadly, that attitude has also killed solar in several other States such as Nevada, Arizona, and New Mexico.
The solar industry is not without its own recourse though. I’ve heard of inverter profiles that are designed such that they will *not* push any power onto the grid. Whatever power is generated is adjusted so that you are producing only what you are consuming. If this is the case, then I can’t really see how a utility could charge you a NEM fee. What is the difference between some small cottage only consuming 2kwh a day or a giant house only pulling 2kwh a day?
Don’t get me wrong… I think this is a horrible solution. The whole idea of solar *should* be to have micro generators all over the State that bolster the grid. If I have excess capacity, it SHOULD be pushed onto the grid versus burning coal/gas/etc to generate that same power. But, the short sighted law of the PUC/Newsom contingent has pushed the solar industry into being creative in a way that benefits only the person that actually owns/services the solar system. I think it is shameful, but you have to live with the laws that you are forced to follow.