2020 was supposed to be a boom year for renewable energy. The COVID-19 pandemic delayed that boom for obvious reasons, but the record-setting first half of 2021 has shown us that, while new renewable installations may have been pushed down the road, the demand has not actually waned.
Instead, renewable energy – led by solar – is emerging from the pandemic stronger than ever, and the solar industry, in particular, is set to continue accelerating and chipping away at the dominance of fossil fuels in a post-COVID world.
- 2020 was a bad year for solar sales and installations, but delayed projects have come back online in 2021, setting records in Q1.
- The inherent problems with fossil fuels have not changed, so any delays in solar adoption, like the one seen with the COVID-19 pandemic, are temporary in nature.
- Solar panels are 2.5x more efficient than they were just six years ago and over 66% cheaper than they were in 2009.
- Near-zero interest rates make solar projects more accessible than ever and should remain where they are throughout 2022.
The Inherent Problems with Fossil Fuels Have Not Changed
The biggest driving factor in the reestablishment of solar and renewable energy’s acceleration is the fact that nothing has really changed. The pandemic made it inconvenient or impossible for many to complete planned installations due to financial hardships, but the reasons behind those installations still hold true.
Fossil fuels are still dirty, and they’re still finite. Once the pandemic has receded and the economy stabilizes, the companies and homeowners looking to free themselves from those problems won’t hesitate to go forward. The booming first quarter of 2021 makes that clear, as a glut of delayed solar projects from 2020 all hit at once, sending new power generation through the roof.
Solar is Rapidly Becoming Cheaper and More Cost-Effective
Like all other advanced technologies, solar panels have fallen in price rapidly while becoming far more efficient. In 2009, solar panels cost $8.50 per watt. A 1,000-watt home installation would’ve cost $8,500. Today, that same installation would cost just over $2800.
At the same time, new solar panel prototypes are pushing almost 45% efficiency, compared to just over 18% as recently as 2015. In short, people today are getting way more power for their buck. Combine that with trends like the emergence of electric vehicles, and we’re heading towards a point where it won’t make sense not to have a solar installation in all but the gloomiest of climates.
Favorable Interest Rates Make Solar More Accessible than Ever
Finally, with the Federal Reserve indicating that interest rates will remain near 0% through 2022, and any increase after that being gradual in nature, financing solar projects is more accessible than ever. Access to capital combined with ever-shortening breakeven timeframes makes it an ideal time for homeowners and businesses alike to take the plunge on solar. As a result, the industry should continue to see strong growth all throughout 2021 and 2022, and likely well beyond.
The global COVID-19 pandemic was as painful a time for solar companies as it was for businesses in any other industry, but while sales and installations ground to a near-halt in 2020, the good news is industry and economic trends mean 2021 and beyond should usher in explosive growth.
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