From import tariffs to corporate sustainability goals, 2018 was a big year for the commercial solar industry, with no signs of slowing down in 2019. To understand what’s on the horizon for the commercial solar market, we asked Ellen Roybal, managing director of strategy and market intelligence for GE Solar, for her take on the industry.
You say that well-known brands like Walmart, Google, Facebook are smart to make renewable commitments as a part of its modern business. Can you explain why?
Renewable energy makes economic sense: businesses can lock in power below retail rates, with the added benefit of a known electricity price for the next 20+ years, hedging against an inevitable rise in electricity rates. On top of that, sustainability is a key focus for the future globally, and renewable energy is a large part of that. Companies have an opportunity to take leadership in this space in a meaningful way, showing their employees, customers, and communities that they are taking action for our future.
What’s next after the Federal Tax Credit?
I think it was smart to have an ITC step down to avoid a large cliff — this industry is prone to booms and busts. The industry has been preparing for this, and on the whole, we’ll see a stabilization for a few years where project economics absorb a lesser subsidy and continue to see cost-out in the supply chain. It’s not something that will kill the industry, nor will it stop or reverse the trend to adopt solar power.
Where do you see the commercial solar market in 5-, 10- and 20-years’ time?
I am incredibly bullish on this segment in general. Businesses and organizations compose about 15% of all electricity accounts in the US and use roughly 65% of all electricity. It’s in their economic interest to pursue renewable electricity, and businesses can make a dramatic positive impact on renewable adoption. I also think that using power onsite is in its infancy. There are huge synergies for adopting solar, then storage, then a controls system, and then whatever is next — in a way to control cost, control operations and, eventually, redefine the grid system.
What do you predict to be the biggest milestone for commercial solar in 2019?
I think we are going to see a boom in volume compared to 2018, but I think the more telling milestone will be the reach. Solar is expanding well beyond what used to be the “core markets” like Massachusetts into a solid set of growing markets like Illinois, and into emerging markets like Utah and Florida. I think the number of states that install solar at a meaningful scale is going to be unprecedented.
Can you discuss the Trump Administration’s imposed tariffs on solar products and how severely you think this will impact the market for commercial solar?
The module tariffs are more inconvenient than anything else. We saw module prices stabilize after a few months of uncertainty — and we’re back on the path of continual cost out of components. The biggest impact tariffs have comes from a lack of clarity for our policy framework — the uncertainty of cost to do business is what hurts the industry the most. We’re able to mitigate known costs, but tariffs create an unknown variable that ultimately customers pay for in the form of higher overall project costs.
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