Bright Horizons: A Look into Solar Energy’s Future

Depending on where you live, solar energy and signs of its use can range from ubiquitous to entirely foreign. Yet the ever-increasing number of products that use and provide solar energy is putting the one-time fad of a green movement on a larger playing field, one in which solar energy could be looking to challenge the established powers.

Solar energy, whether seen as a solar panel farm along a highway in the Midwest or fashioned to every other home’s roof in Hawaii or Arizona, is a growing industry as well as an emerging option in an ever more complicated national energy conversation. The future of energy on a national scale may very well start with an increased use of solar on an individual level. For Craig Lawrence, founder and managing director of Realization Ventures, a consulting firm that helps energy companies launch new products, solar is well past the stage of early adopters and on its way to gaining a foothold in energy supply alongside the more established fossil fuels.

“We’re not into the mass market mainstream yet, but everything is in solar’s favor. The cost of solar continues to drop,” Lawrence says. “The equipment cost will continue to go down, and the cost of other electricity sources will generally go up over time. So every year the economics get better and better for solar.”

With solar becoming a more viable option for the common homeowner, the next hurdle for the industry will be how green energy options are integrated into modern utilities in the U.S., Lawrence says. Unlike other energy options such as wind power, solar can be shrunk down to the size of single homes and buildings. New financing options for homeowners and continuing tax credits for clean energy combine with lower equipment costs to make solar energy a real player, Lawrence says.

Utility companies must figure out how to accommodate buildings that are drawing less from the main grid in an inclusive way, something that not all companies have been quick to do.

Lawrence acknowledges the difficulties with solar energy for modern utilities, such as costs involved in switching from more traditional power generation sources and the sometimes less reliable nature of solar power (need for certain levels of sunlight and the changes of weather). Yet with the increase of solar installations across the country, Lawrence says he sees a need for utilities to find a proper compromise with solar adoption to avoid being cut out of the equation by more homeowners in the future.

“Overall it’s a net benefit to utilities if they would embrace it. That really stands as the biggest challenge, and you can see, at the state and local levels, these battles being waged with utilities placing fees on solar use. So that’s the real battle, as consumers are continuing to look to lower costs,” Lawrence says.

One major area of contention for utilities and solar users is the common practice of utilities “buying back” power produced from solar systems. While Lawrence is excited about the future of energy storage combined with solar power collection, it is still less common for most solar users. Instead of storing excess power in a battery, most solar users receive a credit from the utility in their area for energy shifted back into the grid.

However, Lawrence has seen more utilities lowering the amount of credit for this exchange, moving from what he calls a retail rate of compensation to a wholesale rate. This lowering of the credit for solar users is likely to move consumers even further to the idea of a truly “off the grid” energy solution, Lawrence says.

“The utilities are going to be forced to play nicer with all of this technology, because otherwise they’re just going to start losing customers,” Lawrence says. “Utilities will have to redo their business model, come up with a different way to serve their customers because more and more customers are going to be producing their own electricity. I think they will figure it out, and it will be a positive when they embrace it.”

Retail Ready?

For modern retailers, the question of whether to carry solar power equipment can be complicated. Even as the technology itself becomes more widely used and accepted, some regions simply aren’t as viable due to climate or other factors. Yet there are solutions for retailers looking to become a go-to source for solar energy in different markets.

Some of the most difficult aspects of solar energy products for retailers can be product knowledge and storage issues. Combining the items that are required to assemble a solar system, such as solar panels, converters and batteries amongst others, can lead to ballooning warehousing needs for retailers who might see solar as just one piece of their energy production offerings. Lawrence says he believes the do-it-yourself solar market will continue to grow with the rest of the industry, but it will mostly be driven with tweaks to technology that makes it more digestible for consumers.

“The DIY market is there, it’s very real. Yet the challenge for a retailer is this stuff takes up space and can be hard to stock. That’s where all-in-one systems come in, such as systems that output directly into AC without the need for a DC inverter. They lend themselves to stocking in a store, and it’s a one-box solution,” Lawrence says.

Partnerships with local solar installation companies is also a great solution, Lawrence says, with area retailers assisting a company with one of its most persistent hurdles: customer acquisition.

Drawing on established customer ties in an area, independent retailers can better reach customers who might be skeptical of solar power. Working with a solar installation company, who might not have a showroom or salesfloor to highlight its products in a way that reaches customers, retailers can provide space in their store for a small display and possibly a solar trained associate who can provide knowledgeable details and product advice for customers who would be unlikely to go out of their way to find solar solutions.

“These local solar companies, they spend a lot of time trying to reach homeowners. It’s one of the biggest challenges in the field, and local retailers have access to these customers. They’re a trusted source, so working together, these two companies can solve a lot of their separate problems,” Lawrence says.

Lawrence also cites the emergence of companies designed to help retailers navigate the solar energy market. These companies do not do installations themselves, but help retailers with product selection, quality control and post-installation support. Retailers with multiple locations could possibly work with such companies to develop their own solar strategies.

Personal solar products are also on the rise, becoming an option for the growing outdoors and hunting departments of many hardware retailers. Solar panels that can be attached to hiking backpacks to power personal electronics are of use to modern outdoorsmen as well as customers looking for equipment for emergency situations. The products vary from flashlights that have built-in solar panels and emergency radios to separate panels that can feed into a battery for storage while powering a separate string of lights.

Given the growth of solar energy both as a cost-cutting venture for homeowners and an emerging market for personal products, Lawrence says the future will only see more widespread adoption of products designed to harness solar beams.

“Solar will be a player in the residential market in the U.S. going forward. In the next decade, we will see all new home builds include solar systems,” Lawrence says. “The market will continue to evolve for the better with solar.”