The Five Flavors of Solar: Which One Are You?

People install solar panels on their roofs for many reasons. Some are in it for their love of the environment. Some are in it for the other “green” rationale: making money. Whatever your primary motivation for going solar may be, it’s very important to understand it right from the beginning. This can shape your expectations more realistically and help you make the best solar investment decision for your particular case. So without further ado, here are the five different types of solar enthusiasts.

1. The Environmentalist

EnvironmentalismAs the early-adopter of solar energy, this group of individuals has the longest history with solar energy. They are the children of the environmentalist movement of the 1970s and it is easy to see why they fell in love with solar energy: minimal environmental footprint and zero green house emissions (except for those during the manufacturing and transportation of the solar panels). One can argue that, in this respect, solar energy is even better than other types of renewable energy as it doesn’t require fundamentally altering a natural environment (as does hydroelectricity) or cause risks to certain species (such as the impact of wind turbines on birds and bats). Environmentalists helped commercialize solar energy during its early days. Even when panel efficiencies were a fraction of today’s levels and the prices were much, much higher, they created a niche market for solar products. Today, their share in the overall solar market is decreasing, but their historical role will always be remembered.

2. The Solar Entrepreneur

Solar house moneyThe primary motivation of the entrepreneur is simple, yet ambitious: changing the world one solar panel at a time by building a profitable venture. Although most solar energy entrepreneurs are also motivated by the green credentials of solar energy, their primary driver is profit. They put their business hat on when they evaluate solar energy projects. Their investments may be at the utility scale, spanning megawatts of solar capacity, at the commercial scale, covering the rooftops of large retail buildings, or even at the residential stage as a neat little secondary income generator. It’s no wonder that the feed-in-tariffs that were introduced in many different countries were the rallying cry of the solar entrepreneurs. They were able to build successful business models even though the cost of solar energy was significantly higher than today and they were handsomely rewarded for taking risks in a nascent market. Today, despite the declining role of feed-in-tariffs, the increasing affordability of solar power is attracting the next generation of solar entrepreneurs. They are starting new companies that incorporate solar power into almost all economic sectors, and they are developing many new solar energy projects around the world.

3. The Risk Minimizer

house percentage signThis group has an entirely different take on the economics of solar panels. Contrary to the Solar Entrepreneurs, they are mainly interested in getting a great deal in their utility bills, such as a fixed rate guaranteed for 20 years. Although the inflation rate has been quite tame in the last few decades, utility rates have been going up at a steady pace. In contrast, the cost of ownership of solar panels have been going down at an astonishing rate. In the last five years alone, the price of residential solar panels has gone down 50% to about $5 per installed watt capacity today. Although this price level is not cost-competitive in all locations (due to varying Solar Scores), locking in a fixed electricity rate for 20 years by using a power purchasing agreement already has a lot of appeal for many cost-conscious homeowners. In the next decade, solar installation prices may decline by another 50%, rendering solar power purchasing agreements even more attractive.

4. The Independent Generator

cabin in the woodsThis group of solar enthusiasts really have no other choice but to go solar. Whether their home is a cabin in the woods in New England, or a hut in the middle of the African Savannah, they have one thing in common: no grid connection. Therefore, solar panels are the ideal option to complement, and in certain cases, replace their diesel generators. Armed with solar panels and mobile phones, citizens living in rural areas of developing economies are catching up to their urban peers when it comes to access to information and the luxuries of electrification. Increasing performance of batteries, energy-efficient LED lights and other appliances are also helping the adoption of solar for off-grid applications. Thanks to these innovations, it may even be possible for some of these off-grid villages to remain that way in the coming decades, as energy generation is becoming much more decentralized and the rationale of a centralized grid is losing its appeal.

5. The Late Majority

neighborhood of homesHomeowners who are cautiously observing the evolution of solar energy constitute the absolute majority of the potential market. There are more than 30 million households in the US suitable for solar panel installations alone, and only a fraction of US electricity (less than 1 percent) is currently generated by solar panels. Many indications point in the same direction: further reductions in the cost of solar energy will remove the last remaining barrier for its mass adoption, i.e. price. The remaining issues such as the intermittent nature of solar energy can eventually be resolved with increased adoption and further technological advances in storage technology. Smart Grids (where the demand and supply of electricity is adjusted dynamically) can also help tremendously in convincing the majority of the households who are currently sitting on the sidelines. The freedom of generating your own electricity, and using it to power not only your home but also your electric vehicle has a natural appeal to many people. If doing so also costs less, there will be very few reasons left not to go solar.

So, what is your primary motivation for going solar? Discover solar energy where you live!

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