When a Ripple Becomes a Tsunami: Grid Parity and Beyond
The new wave in Solar energy started as a slow but steady rising tide, and is now irrefutably a top energy source for both consumers and businesses. Improvements in the venerable technology have brought it to grid parity -- meaning it is at or below the cost of purchasing traditional energy in many parts of the world. Grid parity is the event horizon for solar energy.
Solar power is the conscientious environmentalchoice, and increasingly the most affordable energy source. With that in mind, let's break down what grid parity means for solar power, and whether now or later is the right time to buy in.
Grid Parity: Once a Pipe Dream, Now a Reality
Solar energy has arrived to a point that, just a decade ago, was widely written off as impossible: grid parity. Solar energy is now the cheapest form of power available.
This has led to a sudden uptick in governments treating solar as their endgame for long-term energy planning. Additionally, private business is putting their eggs in the solar basket in a much more prominent way.
Solar’s primary costs are in the upfront investment rather than ongoing, relentless energy payments. Grid parity means that our energy source can reasonably be the limitless sun, (which we’re guessing will be around for the next billion years or so). Energy no longer needs to come from expensive, limited, and polluting sources.
Solar Market Buying Power: The Facts
You, ever the savvy consumer, are likely asking, "Should I buy in now?"
There are layers to the answer, especially for buyers in the United States. In short, there has never been a better time to invest in solar panels for personal use. However, the solar market might not be quite as buyer-friendly as it is over the next year. Sadly, the rebates currently available to solar buyers may not exist in the near future.
The Future of the ITC Tax Credit
Since 2005, individuals and businesses enjoyed major savings on solar energy projects thanks to the federal Investment Tax Credit (ITC). This 30% credit on total project costs led to a huge wave of solar installations, long before grid parity was achieved.
Unfortunately, the current political climate in the United States may spell the end of the ITC, with a gradual winding down in benefits incoming:
- Through 2019, the ITC remains at 30%
- In 2020, the ITC reduces to 26%
- By 2021, the credit is 22%
- Starting in 2022, the ITC will only credit for 10% of total project costs.
Despite solar power’s increased popularity as a stand-alone energy source and savings for supplemental energy projects, total project costs for U.S. buyers are about to increase.
Accordingly, the time to invest in solar is now (barring a notable political change). For more information on solar panels and battery storage for your home, enter your zip code below and generate your Free Solar Report with AskSolar.
The Potential of the "Green New Deal"
The current leadership within the EPA and the U.S. government in general is stacked against a guaranteed extension of the ITC. Hope for the long term can be found in the proposed Green New Deal.
The ultimate purpose of the plan is to meet the Paris Agreement's stated goal for limiting climate change: no more than 2.7 degrees Fahrenheit by 2100, which scientists say may be the only hope to avoid increasingly destructive flooding and weather events.
Beyond offsetting climate change, the Green New Deal intentionally echoes President Roosevelt's landmark legislative project. The plan creates a substantial number of new jobs in the green energy space, with strong encouragement for new solar energy projects. This would lead to more innovations in solar efficiency, thus lowering costs.
Currently the Green New Deal is the work of a small-but-growing community of lawmakers. Unfortunately, the Senate and Executive branches are currently stacked against them.
Should the Green New Deal gain support, we stand a chance of seeing affordable solar options come around again. At the moment, 2019 holds the best chance for saving money on solar hardware and labor.
The Future of Energy is Solar
The gradual decrease of the ITC credit is unfortunate, but the overall message remains clear: solar energy is the future.
Solar energy is a crucial tool for decreasing emissions and saving lives from the ravages of climate change in the coming decades. Grid parity makes it the best choice from a purely cost-focused mindset.
Interested in taking advantage of the final months of the 30% ITC benefit? Contact us to learn more about installing and maintaining solar panels in your home or business today.