As we step into 2024, the solar industry continues to evolve at an unprecedented pace. At AC Power, our team of experts keeps a close eye on the emerging trends shaping the future of solar energy.
In this piece, we had three staff members share a trend they will be closely watching in the coming year. From the electrification wave boosting energy demand to the innovative strides in battery storage, and the promising growth of community solar, these perspectives offer a glimpse into the dynamic changes and opportunities that lie ahead.
Do you agree with our picks? What trends are you watching in the coming year? Let us know in the comments!
Electrification Driving Demand
Corey Hindin, Senior Director of Business Development
We are on a trajectory where the demand for electricity is increasing, primarily due to the adoption of electric vehicles (EVs), the electrification of households through heat pumps and smart appliances, and the growth of data centers and other technological infrastructure. This trend presents both challenges and opportunities for renewable energy developers. I expect to see shifts in value and price signals for clean energy development, rewarding flexibility and resilience – including potentially a surge in solar + storage, led by (for better or for worse) changes to California’s net metering and community solar policies.
Increased investment in grid infrastructure, such as high-voltage transmission lines, is crucial. These lines can serve as arteries that connect areas of high renewable energy supply to areas of high energy demand and add more capacity for future renewable generation. The surge in demand from electrification does not need to be a cause for alarm, but should be seen rather as a call to action, and I am excited to see folks across the renewable energy industry rise to the challenge.
Increased Reliance on Storage
Brent McDevitt, Director of Business Development
As Corey alludes to above, the demand for a more dynamic and cleaner grid is driving a surge in energy storage projects and innovations. Battery storage technologies are essential to speeding up the replacement of fossil fuels with renewable energy. These systems store energy from renewables like solar and wind for later use to reduce imbalances between energy demand and energy production, and they are set to play a vital role in achieving an efficient and clean electric grid.
Battery Energy Storage Systems are considerably more advanced than the batteries you keep in your kitchen or bedroom drawer. Battery storage has a key part in ensuring businesses and other entities/end users can be powered by green energy, even when the sun isn’t shining.
As extreme weather exacerbated by climate change continues to devastate U.S. infrastructure, government officials have become increasingly mindful of the importance of grid resilience. Energy storage helps provide resilience since it can serve as a backup energy supply when power plant generation is interrupted. In the case of Puerto Rico, where there is minimal energy storage and grid flexibility, it took approximately a year for electricity to be restored to all residents after Hurricane Maria.
The International Energy Association (IEA) estimates that in order to keep global warming below 2 degrees Celsius, the world needs 266 GW of energy storage by 2030. Under current trends, Bloomberg New Energy Finance forecasts that the global energy storage market will hit that target and grow quickly to a cumulative 942 GW by 2040, representing a $620 billion investment. Several states are already leading in energy storage policy, setting examples for others to follow. Energy storage is becoming an integral component of a cleaner, more resilient electric grid, and we expect the coming year to be a defining one for the technology.
Community Solar Poised to Grow
Tina Carr, Stakeholder Outreach
Community solar is set to end its downward slide in 2024. A recent Wood Mackenzie report, in collaboration with the Coalition for Community Solar Access (CCSA), projects a cumulative capacity increase of 14 gigawatts (GW) by 2028. This growth follows recent declines due to supply chain, interconnection, and siting challenges.
A major impetus for this optimism is the federal Inflation Reduction Act, under which the Greenhouse Gas Reduction Fund (GGRD) is allocating $7 billion to support the creation and expansion of community solar programs through its “Solar for All” competition. To put that in perspective, developers spent about $1.3 billion on U.S. community solar projects in 2022, according to the report.
Markets with existing community solar programs – 22 states and Washington D.C. – are poised to benefit immediately since they’re already poised to unlock federal funds. But policies permitting community solar are working their way through more state legislatures in various forms and if advocates are successful, these states too will be able to leverage this available money, as my AC Power colleagues have written. Advocacy and education will play a major role in getting community solar-friendly policies across finish lines, and that’s where a significant growth in the collective knowledge around the many environmental, economic and social benefits of solar come into play. With the growing awareness, 2024 might be a pivotal year.
We have a way to go as we work on building a more sustainable future, but we’re trending in the right direction!