If Biden wins, solar prices could be hugely impacted. As companies ‘reset for growth beyond coronavirus,’ businesses are looking towards the future for the first time in months. Many businesses are operating under real financial stress and are looking to plummeting solar panel prices as one key way to save money by cutting the cost of energy.
Businesses all around the world are investing in solar, taking control of their energy, saving money and doing good for the environment at the same time. A massive 9x drop in the price of solar panels since 2006 is reason enough to read on. If you are thinking that solar energy might be right for your business, here are some questions to consider:
1. Why Should I Spend Time or Money on Solar Panels Right Now?
At Avolta Energy we have found that there are three main reasons that businesses choose to invest in a solar system:
- Financial benefit – saving money
- Marketing benefit- brand elevation
- Environmental benefit- meeting carbon emission goals
If any or all of these are relevant to your business (hint – they all should be…) then you should talk to us about how we can help.
2. Yes but Why Invest in Solar Panels Now? I have a lot of other things to worry about….
Because solar prices are really low right now. As Covid-19 continues to hurt the demand side of things as the economy is weak, supplies are back to normal.
When Covid-19 caused the global economy to shut up shop in 2Q, solar panel prices tanked.
Now that the global economy is starting to get going again, prices are ticking higher.
And if Joe Biden wins the US election in November, and manages to enact his “Build Back Better Plan” (3BP) this would be incredibly bullish for the US solar build out. US solar capacity has been growing by around 20 GW per annum for the last 4 years, in order to meet Biden’s decarbonization plans this would have to jump to over 100 GW per annum. Biden has promised to ‘reform and extend’ the clean energy tax credits which have been key to keeping solar growing – and which are otherwise due to begin phasing down over the coming years.
If Biden Wins, Solar Panel Demand In The US Will Have To Surge To Meet His 3BP Decarbonisation Plan
Putting this US jump, from 20 GW to >100 GW per annum, into a global perspective – global solar installations have been running at 117 GW in 2019 and 2020 is forecast to dip a bit to 112 GW. An extra 80 GW of demand from the US is therefore a very material increase and if it is complemented by green recovery plans elsewhere – 2021 could see demand for solar panels surge. Production capacity continues to increase, but if demand surges then solar panel prices are unlikely to fall much next year.
This dynamic is clearly at play in the market, as solar company share prices are rising and falling along with the odds of a Biden win.
3. Key Reasons Not To Wait To Install Solar Panels
– Even if solar prices do keep falling next year, you would be missing out on your savings for the year, which would (in our extensive experience) almost always be more than what you would have saved by waiting.
– And there is always the chance that your circuit gets full. The current law on distributed generation caps the maximum capacity of all generation systems (including solar) attached to a circuit at 15% of annual power demand. This means that you could wait for prices to fall next year only to find that your neighbors have eaten up the full 15% – meaning you won’t be able to install solar energy until the law changes, and there is no sign of that happening. The number of circuits getting full keeps on rising. Don’t get left out.
4. Will Solar Panels Save Me Money?
At Avolta Energy we design our solar systems to maximize savings for our clients. Buying the energy system outright will typically see a payback period of 3-5 years in terms of cash saved off energy bills. That is a 20-33% annual return on investment which will last for the life of the solar system which is 25-30 years. That is a remarkably great investment.
Avolta Energy works with CTW Leasing to provide a full range of solar financing solutions to our clients. If you qualify for 100% financing, that will mean nothing but savings from day one. The savings on your electricity bill will more than pay for the financing of the system.
5. How Can Solar Panels Improve My Business?
There are two key ways that investing in solar can help your business:
- By saving money on energy while solar panel prices are super low you will free up cash to invest in other strategically important aspects of your business.
- Your customers care about who they do business with. A solar system shows them that you care about their planet as well as your own bottom line.
6. If Solar Panels and Their Prices are so Great, Why Don’t All Businesses Install Them?
Many well-known companies have already gone solar, both here in Costa Rica and globally. For those who have not, it’s usually because businesses don’t know how much money they could save, or they had a bad experience with solar 5, 10, or 15 years ago. To those businesses, we would say: talk to us! The technology has improved enormously over the last few years, with solar prices collapsing by over 80% over the last decade. Just as your cell phone has gotten massively better over the last 10 years, so have solar technologies.
Launching a solar system is fast: Businesses who survive the coronavirus pandemic will be those who exhibit organizational speed.
Many businesses do not realize that they could get their solar system financed quickly and easily, meaning all they would have to do is sit back and count their savings. McKinsey & Co. recently surveyed company executives and directors who say an essential ingredient for outperformance in this time of unprecedented change is organizational speed. Tack on the impact of a Biden win and nimbleness will be especially rewarded.
Find out just how fast you can have a custom solar energy system designed, installed, running, and delivering savings. And why investing in solar energy is good for your bottom line, the country and the planet. please contact us.
Seth Kleinman is a co-founder of Avolta Energy, a company specializing in solar panels and batteries, and was previously vice president of Morgan Stanley and Citigroup. The London Financial Times described him as “one of the world’s leading energy analysts”. In 2017, Seth traded a high-level career on Wall Street as Managing Director of Citigroup and Global Head of Energy Strategy for the opportunity to change the world from scratch.
He founded GrupoCTW to bring together high-quality, socially responsible companies to realize this vision of sustainable and money-saving solutions to the global water and climate crises. Avolta Energy is the solar panel and battery company that solves clean energy for GrupoCTW.