Many industry experts are optimistic that solar energy will one day replace fossil fuels as the leading energy source. There’s good reason to be bullish about solar energy’s upward trend. Even before President Biden signed into law the Inflation Reduction Act, solar energy was on a positive course. States that had passed community-solar legislation offered considerable incentives to companies looking to provide affordable renewable energy to communities. Biden’s major legislation includes language that strengthens federal incentives for manufacturing and using solar panels. The legislation has both economic and environmental aims that will help community solar expand and make it more accessible to more Americans.
Inflation Reduction Act
With wide recognition that we are already facing the consequences of global warming, many stakeholders see a bright future for community solar. President Biden just signed into law the Inflation Reduction Act, a massive spending bill that addresses healthcare, taxes and, among other things, renewable energy. The bill offers the renewable-energy sector attractive tax benefits. Combined with other available tax incentives, the community-solar industry could see tax incentives of up to 60 percent. Additionally, there are tax credits for manufacturing solar-panel components and accessories. The Biden administration’s goal is for community-solar programs to power five million homes and create $1 billion in savings on its way to attaining 100 percent clean electricity by 2035.
Increased Output and Accessibility
A 2018 article predicted that American community solar could produce between 57 and 84 gigawatts by 2030, an increase of 80 times 2018 levels. (Three gigawatts can power about half a million homes.) Federal incentives and state support are key to expanding community solar’s capabilities. The more incentive available to community-solar companies, the more likely they are to expand their services. In turn, the more communities that community-solar companies serve, the more customers will leave conventional energy providers for community solar. The economic impact is substantial, with most community-solar customers saving 10 to 15 percent on their electricity bills. While there is currently enough solar capacity to power nineteen million homes, accessibility still remains a major concern. Seventy-five percent of US households do not currently have access to solar power. That’s why federal programs like Justice40 are working to make sure that the benefits of community-solar programs reach underprivileged and underserved communities. Much of the current administration’s focus on access is driving community solar’s entry into new markets, with both economic, environmental, and social-justice benefits at stake.
It’s Getting Cheaper
The cost of solar energy is dropping yearly, with the national average at 13.30 cents per kilowatt-hour (kwh). Since 2010, costs for solar energy have dropped 70 percent. Because sunlight is a free, renewable, and clean source of energy, it has an innate advantage over fossil fuels. As costs continue to go down and community solar continues to become more accessible, there is every reason to believe that community solar will become a major player in the energy market.