03/28/2024

Solar Rooftop Revolution Fizzles in U.S. on Utility Pushback

Rooftop solar, which has surged more than 1,000 percent since 2010, will barely grow at all next year.

Residential installations are expected to increase by 21 percent this year, but in 2017 the figure will inch upward by about 0.3 percent. The change comes as utilities push backagainst mandates to buy the electricity and shifting tax policies curb demand. Throw in sliding electricity rates and it’s clear the economic benefits of rooftop panels are no longer so obvious to consumers. 

That’s forcing rooftop developers including Vivint Solar Inc., Sunrun Inc. and Elon Musk-backed SolarCity Corp. to focus on profitability instead of growth.

“Much like PC manufacturers in the 1990s, solar installers need to realize substantial new customer sales each year just to tread water in terms of annual revenue,” Hugh Bromley, an analyst at Bloomberg New Energy Finance in New York, said in an e-mail. 

Residential installations are already slowing from the 79 percent expansion in 2015. Developers are expected to add 2.76 gigawatts this year and that will inch upward to 2.77 gigawatts in 2017 as investment slips 6.4 percent to $6.8 billion, according to estimates from Bloomberg New Energy Finance.

“After growing as much as it has, sustaining high double-digit growth rate forever is not realistic,” said Pavel Molchanov, an analyst at Raymond James Financial Inc. in Houston.

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