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April 1, 2015 | 3 Solar Trends You Can Expect in 2015
The solar industry in the United States has boomed for the past five years. For some, the pending ITC expiration in 2016 has cast a pall over 2015. But we believe handwringing is overrated. Here are three solar trends that should gladden your hearts this year:
1. PACE financing will revolutionize the commercial-project market.
Utility-scale solar projects find financing easily. Ditto the residential market (big corporations have figured it out). The commercial sector, however, is still struggling to find the money to complete projects.
Small-commercial projects are difficult because there are so many lawyers involved. Often, each individual tenant has to sign separate deals, and all their advisors want to change a comma here or a sentence there. It’s nearly impossible to standardize the paperwork, so most developers decide it’s not worth the legal due diligence to pursue them.
But we believe that PACE funding, which has worked at the residential level, will change the way people look at commercial financing in 2015 Property Assessed Clean Energy (PACE) will allow companies to finance solar projects through property taxes. They can finance 100% of the project and pay it back as a property tax assessment for up to 20 years. Simple, right? PACE could expand the commercial market exponentially — and we see great potential there.
2. The fights between utilities and solar advocates will end.
In 2014, utilities realized the potential threat solar posed to their profits and business models, and many waged an all-out war on net-metering — the most effective mechanism to expand solar in states. In nearly all the battles, the utilities lost.
Utilities will learn to stop worrying and embrace solar as part of the new energy mix. The market will force this acceptance, as new players (most notably gas companies who believe solar is an excellent complement to their core businesses) enter the market and capture the power of solar energy. As a result, the poisonous atmosphere that has evolved between solar advocates and utilities will end.
3. For the next two years, the utility market will boom.
As mentioned in the open, the ITC is set to expire in 2016, and it’s causing some developers to pull back in fear. Not us. The next two years provides opportunities to partner with best-in-class partners and expand the utility-scale market quickly.
Utilities will be begging developers to add solar plants to their electricity-generation options. That’s where developers with the financial backing, track record of excellence, and commitment to solar for the long haul will step in and fill the void.
So ignore the wailing and gnashing of teeth of those who believe the future of solar is dimming. As you will see in 2015, our industry’s prospects remain brighter than ever.