For years, many commercial and residential property owners have viewed solar power as a poor financial decision due to the high costs of acquiring and installing solar panel units. However, as this recent article by Jim Witkin of The Guardian points out, the continuing decrease in cost for solar panels—estimated by the Solar Energy Industries Association to have dropped 51 percent from the start of 2011—has led to an increase in the number of solar energy installations, despite the recent imposition of duties on Chinese panels and the decline in energy costs in certain areas due to the impact of shale gas. Furthering the trend is the increased number of state initiatives in favor of solar production—whether through tax credits or the adoption of renewable portfolio standards.
My colleague Joe Endres’s August 21, 2012 blog post highlights one such program. His post discusses the NY-Sun Initiative, which will provide a new array of solar tax credits, as well as making available awards totaling $137 million to solar project developers and businesses that install large photovoltaic systems.
Other states are trying to make a further push into solar by way of renewable portfolio standards. The governor of Connecticut, Dannel Malloy, recently announced a draft comprehensive energy strategy, which includes, among other things, a reexamination of the state’s renewable portfolio standard—currently at 20 percent by 2020—in order to determine the probability of increasing that standard through the use of renewable sources. On November 6, citizens of the state of Michigan will be voting on Proposal 3, which would adopt a renewable portfolio standard of 25 percent from renewable sources by 2025. More than 30 states have already adopted similar renewable portfolio standards, and with the rising cost of energy production, this trend is certain to continue. In addition, New Jersey, formerly home to one of the most successful state programs, has revised its solar renewable energy credit (SREC) program, increasing the required amount of solar power purchases by utilities in an effort to reverse the decline in SREC prices.
As tax incentives continue to exist on the federal and state level, and as states continue to develop and enhance their renewable portfolio standards, one can expect to see solar development continue to expand.