10/31/2024
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Rising power prices could drive nearly half of US households to rooftop solar:
Widespread rooftop solar adoption could change the type of generation resources that utilities need, according to analysis by Enverus Intelligence Research.
Workers installing solar panels on a residential homes roof.
States with higher retail energy prices, including Texas, California, Florida and New York, will see higher rates of rooftop solar adoption, according to Enverus Intelligence Research.
Rising energy prices could spur 47% of U.S. households to install rooftop solar by 2050, according to analysis by Enverus Intelligence Research. Most installations will be paired with storage by 2032, Enverus said.
States with higher retail energy prices, including Texas, California, Florida and New York, will see higher rates of rooftop solar adoption. But installations may not accelerate in states like Iowa and Utah, which tend to enjoy lower power bills, said Kevin Kang, an analyst on the energy transition research team at Enverus.
In states with more rooftop installation, utilities may see significant changes to the typical daily load curve, Kang said. That may prompt them to reconsider the generation mix they choose to deploy.
Rising power bills and falling solar installation costs stand to accelerate residential solar installations in the years to come, according to Enverus.
Technological advances continue to drive down the cost of rooftop solar panels — as they have done in years past, Kang said. Increases in efficiency have decreased the number of panels needed to supplant a household power bill, he said. The residential solar industry could also get a boost from interest rate cuts that began this week.
Many residential installers have seen orders fall as a result of high interest rates, Kang said. In some cases, he said, the cost of financing a solar installation may be greater than the installation itself.
At the same time, an increased reliance on intermittent generation resources as well as rising electric demand is driving retail prices upward, which means more U.S. residences stand to save money from choosing to go solar, Kang said. This is true even in states that have reduced the value of net metering rebates, he added.
If the current trends hold, Kang said Enverus expects 13% of U.S. households to install solar panels by 2030. By 2040 that number jumps to 29%, and nearly half of U.S. homes could have rooftop panels by 2050, he said.
Rooftop installations in just three states — California, Texas and Florida — could generate 180 GW by 2050, Kang said.
For the immediate future, this additional generation should be a boon to utilities, Kang said. Although he believes the influx of demand from data centers, EVs, green hydrogen and the electrification of other industries and buildings is probably exaggerated, these trends will trigger load growth for the first time in decades. Increased rooftop generation should help utilities offset some of this growth, he said.
“If retail power prices go up and people are installing more solar, you will have less residential load,” Kang said. “But that will be eaten up by data centers in the long-term. Consumption is going to grow.”
But the reduced residential load will also trigger a shift in the traditional demand curves utilities experience, Kang said. Demand could drop to very low levels during the day, and the addition of residential energy storage could push peak demand back to 8 p.m. or later, he said. That will raise questions about how utilities plan to serve a demand curve that peaks after the sun sets, he said.
“It’s a huge question,” he said. “What is the generation mix going to look like?”
