U.S. Businesses Keep Pushing the Solar Power Envelope

Business leaders have become widely known for their support of renewable energy, and now a major solar industry trade organization has quantified the impact of that support. In its seventh annual Solar Means Business report, the Solar Energy Industries Association tracked 7,000 megawatts of installed solar capacity among U.S. businesses in 2018, up from only 2,500 MW the year before.

The number of projects tracked by SEIA also took an impressive jump. The 2018 report tracked 35,000 projects, compared to only 7,000 in 2017.

Solar power means business in 2018: Counting all the solar projects

Part of the jump in numbers has to do with a change in reporting. The previous six surveys tracked only solar arrays installed onsite by businesses.

Until recently, that metric would have been sufficient to track growth. Onsite solar has been the main pathway for solar adoption by businesses, typically in the form of rooftop solar panels.

Now, other options are emerging. Accordingly, the 2018 report includes, for the first time, large solar arrays that have been constructed offsite. In fact, offsite acquisitions accounted for more than a third of solar energy procurement by businesses in 2018.

Including both onsite and offsite, four widely familiar brand names top the list of largest solar buyers: Apple, Amazon, Target and Walmart. Large corporations also dominate the other six slots in the top 10, though not all are necessarily household names across the U.S.: Switch, Google, Kaiser Permanente, Prologic, Salvay and Fifth Third Bank.

White House support or not, solar (power) means business

The continued growth of the domestic solar industry is especially notable in consideration of White House policy favoring fossil fuels over renewables.

When President Donald Trump started the process to pull the U.S. out of the Paris climate agreement in 2017, solar advocates feared an industry slump. Those concerns were amplified last February when a new 30 percent tariff on imported solar panels went into effect.

Despite these challenges, the report notes that more than half of all installed capacity by corporations occurred after 2016, the last year of the far more solar-friendly Barack Obama administration. The report cites lower prices, more flexible financial tools and new procurement options as driving solar growth.

In addition, supportive programs are still running strong at Department of Energy, though mainly under the media radar. The agency’s initiatives include foundational research designed to lower the cost of solar panels and other solar installation hardware. Programs to help reduce “soft” costs of rooftop solar are also included.

The Department of Energy has also been leveraging solar support among local governments and businesses. The agency and its private-sector partners work with local governments and rural electric cooperatives to introduce more renewables.

Other related programs supported by the Department of Energy include the Better Buildings initiative and the Solar Ready Vets job training program.

Why solar power?

Support from the Department of Energy is important, but the key factor driving the solar industry is continuing demand from U.S. business leaders.

Early large-scale adopters—including retail and tech giants like Amazon, Target, Walmart and Google—helped to build economies of scale. Their willingness to absorb relatively higher costs contributed to today’s robust, competitive solar market.

Now solar power can compete directly with fossil fuels in many parts of the U.S., and costs are still dropping. That direct bottom-line incentive is just one element fueling the business demand for solar.

Companies are also becoming more aware of the security and resiliency advantages of onsite solar plus energy storage. Demand for renewables from their supply chain partners is another factor. Consumers and clients are also demanding more solar and other renewables.

In particular, onsite solar provides corporate citizens with social responsibility opportunities for trading or sharing clean power with the community. They can also contribute to demand shaving and other community reliability initiatives enabled by smart grid technology.

Mainstreaming the solar message

Solar has come a long way in just a few years for commercial electricity users, but a recent survey by Deloitte indicates that residential consumers are still wary of installing solar panels on their roofs.

In that context, the new SEIA report suggests that corporate solar energy buyers can help motivate residential consumers to adopt rooftop solar by helping to build public awareness that solar panels are mainstream and reliable.

Part of the impact is simply visual. SEIA points out that an average of more than 6 million people visit a Walmart store with onsite solar every week. SEIA also notes that Amazon offsets the CO2 equivalent of 200 million miles of ground delivery with solar, and Apple accounts for more than 60 billion smartphone charges with its solar facilities.

What’s next for solar?

The new solar tariffs are already in the first stages of a planned phaseout. All things being equal, that should provide some relief to the U.S. solar industry.

However, new challenges loom on the horizon. Reuters reports that U.S. solar companies are stockpiling solar panels in anticipation of the clock running out on a 30 percent federal tax credit for solar projects. The tax credit will be eliminated entirely for residential customers after a three-year phase-out, Commercial and industrial customers can still qualify for yearly step-downs until 2022, when their tax credit will settle at 10 percent.

On the other hand, given the likelihood that both hard and soft costs for solar energy will continue to fall, business leaders will still have ample bottom-line justification for continuing to push the market for solar.

Companies and their partners are already seeking new opportunities to give smaller solar buyers a leg up. One interesting development in that area is a new solar partnership between Bloomberg, Cox, Gap, Salesforce and Workday.

Earlier this year, the five companies claimed 42.5 megawatts from a proposed 100-megawatt solar farm in North Carolina. By serving as “anchor tenants,” the partnership helped to motivate construction of the new project, enabling an additional 58.5 megawatts of solar to go into the grid.

Image credit: U.S. Department of Energy/Flickr