Home Solar Power Blew Up In 2020
I’ve been covering the solar power industry for more than a decade. I recall writing about the industry blowing up way back at the beginning, because annual installations did indeed climb rapidly compared to previous years. The nice thing about technology learning curves is that you can tell such stories over and over, and they continue to be exciting.
A few months ago, I noted that solar PV panels were 12× more expensive in 2010 than in 2020 (and 459× more expensive in 1977). Costs that drop like that lead to increasing adoption. And 2020 reportedly continued the trend. “Global demand for home solar has gone ‘through the roof’ in 2020,” according to Bloomberg New Energy Finance.
Despite the pandemic, Bloomberg New Energy Finance found that home solar PV installations were 21% higher in the first 7 months of 2020 compared to the first 7 months of 2019.
Bloomberg New Energy Finance’s postulation on why solar power installations grew so much was that people on lockdown became more aware of home energy costs and also just went on a stir-crazy home improvement frenzy (or simply had the time for a home improvement frenzy). Those are logical theories, but as I noted, solar power installations have been growing more or less continuously as costs have dropped, so we could probably assume that 2020 installations were going to be up no matter what.
Also, Bloomberg New Energy Finance noted that companies leading the charge (no pun intended) on this home solar power (and energy storage) growth were NeoVolta (OTCQB: NEOV), Tesla (NASDAQ: TSLA), Jinko Solar (NYSE: JKS), Canadian Solar (NASDAQ: CSIQ), and Array Technologies (NASDAQ: ARRY). I’m not sure about the others, but Tesla certainly made some major moves this year on the solar front. It dropped the price of home solar PV to $1.49/watt (after the US tax credit for solar) across the country, a price no one else beats as far as I’ve seen, a price far below the US average, and a single-price geographic breadth that is unprecedented in the US home solar industry.
I interviewed Elon Musk about Tesla’s wicked-low solar pricing and he highlighted that very low customer acquisition (marketing) costs as well as simple and low-cost financing allowed Tesla to offer such low solar pricing. In his own words:
“Solar panel cost is only ~50 cents/Watt. Mounting hardware, inverter and wiring is ~25 cents/Watt. Installation is ~50 cents/Watt, depending on system size.
“The other solar companies spend heavily on salespeople, advertising and complex financing instruments. We do not.”
The extremely simplified system design also must help to cut costs.
Bloomberg New Energy Finance also highlighted strong growth in residential energy storage in combination with solar power growth, and this is clearly a well known area of expertise for Tesla, thanks to its Powerwall offering as well as its overall reputation as a battery leader. Bloomberg commented on Tesla as well:
“Best known for its electric cars, the renewables giant is a major global player in solar energy and storage. Tesla Solar Roof installations tripled in the third quarter of 2020, according to the company. In Lauderdale County, Mississippi, the Solar Roof V3 will be on installed on rooftops in the world’s first smart neighborhood. And on Twitter, Tesla has been urging people to purchase its home solar panels before the federal tax credit drops from 26% to 22% at the end of 2020.
“Meanwhile, the Powerwall has been Tesla’s flagship residential storage product since its launch in 2015. The company installed its 100,000th Powerwall earlier this year, and high demand has led to significant delivery delays. As units become harder to get, Tesla has also increased the price of the Powerwall by about $500.”
I have also heard of and noticed a slow Tesla solar installation process, which I imagine is tied to a combination of permitting delays and a deficiency of staff or contractors for installing the system.
The other companies Bloomberg New Energy Finance mentioned are not actually involved in residential solar PV installation (it’s unclear why they were all lumped together in the news release), but NeoVolta has a significant energy storage component to it.
“San Diego based NeoVolta, whose stock is trading around $3.50 per share, is the only pure-play energy storage company on this list. NeoVolta announced today that its purchase orders from PMP Energy have reached $902,000, the latest a reorder of $425,000. This is part of a three-year exclusive distribution agreement the two companies signed earlier in 2020. In exchange for a minimum of up to $15 million in purchase orders, PMP Energy will provide dealers with training and certification to install NeoVolta’s NV14 and NV24 storage systems. To date, PMP Energy has trained and certified dealers in four states plus the territory of Puerto Rico.
“This recent order, which followed PMP Energy’s initial $473,000 purchase of NeoVolta systems, was the first reorder of what are expected to be monthly orders of this size or larger.
“NeoVolta recently announced a 211% quarter-on-quarter increase in first quarter 2021 revenues. The company reported that revenues for the quarter ending September 30, 2020 were $1,000,171, compared to $321,650 for the same quarter the previous year. With a dramatic increase in demand, NeoVolta has doubled its production in 2020 and plans to quadruple capacity by the end of this year. Read more about NEOV and recent news developments by visiting: https://www.neovolta.com/news/“
Overall, rooftop solar power is up a great deal in terms of new power capacity but also in terms of electricity generation in the US. As I reported recently, in the first three quarters of 2020, US solar power was up to 3.4% of the country’s electricity generation, which was up from 2.7% in the first three quarters of 2019 and 2.3% in the first three quarters of 2018.
In terms of new installation capacity, the story looks even better. Solar power accounted for 43% of new power capacity in the United States in the first 3 quarters of the year.
Naturally, that means that other major players like Sunrun and SunPower are also selling a lot of home solar PV systems, in addition to Tesla. And there’s a vast network of small, localized solar power installers around the country as well.
If you haven’t gone solar yet and are interested in going solar, I encourage you to check out the pricing and contract details of several home solar power installers. If you do decide to go with Tesla and don’t have a friend or family member who can offer you a referral code, feel free to use mine — https://ts.la/zachary63404 — for a $100 discount.
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