While I don't believe the headline in TIME that the rooftop solar industry is on the verge of collapse, I do firmly believe that rooftop solar will look very different by 2025. What's not debatable is that over 100 residential solar companies folded in 2023, and some big names have already announced closures just one month into 2024. The companies that are still operating have evaluations that have plummeted over the past 12 months. Heck — even the installer of my New Jersey based project has filed for bankruptcy. Now how am I supposed to get my solar and storage system serviced?! Ara Agopian of Solar Insure does a great job of explaining the drastic shift in the residential solar market.
California has been hit especially hard given the recent net metering rules (NEM 3.0) changed by the California Public Utilities Commission which cut solar export payments by 75%. I recall a keynote by SEIA President & CEO, Abby Hopper, at the SEIA Member Reception at RE+ in 2022 where Abby railed against NEM 3.0 saying it could lead to tens of thousands of lost jobs. I raised an eyebrow in disbelief. Less than two months ago, CALSSA's Executive Director, Bernadette Del Chiaro, issued a press release saying 17,000 jobs would be lost to NEM 3.0, and I still thought that number was inflated...until now. I don't think Abby predicted how bad the Interest Rate would be when NEM 3.0 took hold. I don't think Bernadette realized the impact outside of California. And I now believe that the loss of 17,000 California jobs is an understatement. I conclude that the rooftop solar market, particularly in the residential market, is putting a big damper on the job creation news coming out of the Inflation Reduction Act.
Got Solar Lemons? Make Solar Lemonade!
Demand for energy is up.
Investments for renewable energy are up.
Large-scale installations are up.
The demand for distributed energy systems is up.
Even with the downturn in residential solar, the demand for energy and solar energy is increasing. This trend has us here at EnergeiaWorks wondering: is this an opportunity for community solar to really take off?
A shift in consumer preferences away from individual rooftop installations has occurred during the recent Interest Rate changes, indicating that community solar, where multiple individuals share a centralized solar array, could become a more appealing option. While some States are just getting started on this development, SEIA reports that 41 States have some form of mandate or incentive for community solar and 6.2GW of projects are operational. EnergeiaWorks has long helped community solar developers find top talent, so I hear first hand how our customers struggle to lock in subscribers for their projects. Perhaps there's a big opportunity for the residential integrators to partner more with community solar.
I realize that the interplay between residential and community solar is complex: outcomes can vary based on regional factors, market conditions, and policy landscapes. I also suspect that a balanced and diversified approach to solar, incorporating both residential and community solar, may contribute to a more resilient and sustainable solar industry. John Engal for Renewable Energy World, for example, lays out some facts and challenges in his recent piece about the state of community solar.
I'm bullish on community solar growth in 2024, so let's see what the next eleven months bring. #solarcoaster