What to Expect from Residential Solar Consumers in 2023
- Residential,Business of Solar,Industry News
The Road Ahead Looks Promising for Residential Solar Installers
A new year means new opportunities to build on the previous year’s successes. If we learned anything from 2022, residential consumers remain primed for solar power. According to a recent report from the Solar Energy Industries Association (SEIA), Q4 2022 saw historic residential solar installations of 1.57GWdc, a 43% increase over Q3 2021 and a 16% increase over Q2 2022. This represents quite the industrywide achievement, considering the lingering pandemic-related supply-chain disruptions during much of last year.
These strong numbers, coupled with new federal incentives and declining costs, indicate a healthy year ahead for residential solar.
Educating Solar Customers About the IRA
Many of the provisions and incentives included in 2022’s Inflation Reduction Act (IRA) went into effect starting at the beginning of the year. Although the bill provides more certainty over the long-term availability of the residential solar investment tax credit (ITC) through 2030, installers should act fast in educating homeowners and customers about the 30% credit for residential end users.
As solar installers know all too well, projects don’t simply occur overnight, and it can take months of engagements and touchpoints to build a customer relationship enough to close the deal. And customers on the fence about installing a rooftop solar system will need guidance on how the IRA might reduce their initial investment and accelerate the project’s return.
At the same time, some customers already aware of the ITC might instead opt to “see how it plays out” before making a decision. However, this sit-back approach will only delay the return on their investment. Installers can still help these potential customers understand that the time to install a rooftop PV system has never been more favorable than it is now.
Closing the Gap Between State Solar Incentives
While the benefits of the IRA are country-wide, solar installers and customers in some regions can access more options than others.
Arizona’s solar tax credit covers 25% of the total PV system cost up to $1,000. Meanwhile, California offers several benefits incentivizing residential solar adoption, from state-wide rebates to tax exclusions for solar energy systems to various grants and loans.
New York provides some of the best incentives in the nation. The NY-Sun Megawatt Block Incentive lets consumers claim dollars-per-watt cash rebates for their solar systems, and homeowners can deduct up to 25% of solar energy expenses from their tax bill. Additionally, homeowners can avoid paying the state’s 4% sales tax on solar equipment.
These incentives aren’t only relegated to sunny or highly-popular states. In Delaware, residents can claim up to 50% of installation on photovoltaic, solar water heating, and other renewable energy technologies through the state’s Green Energy Program.
Unfortunately, not all states encourage residential solar deployment. Despite their high irradiance levels, many sunny states, such as Georgia, Kansas, Nebraska, and the Dakotas, offer zero residential solar tax incentives, forcing homeowners to cover the total cost.
Even further, in addition to a lack of solar tax credits, utilities in some states, such as Alabama, charge residential end users a fee to install a rooftop PV system, greatly deterring potential customers and stifling residential solar installers.
However, the IRA primes these low-incentive states for an influx of residential solar interest and installation projects. And the 30% solar Investment Tax Credit (ITC) gives residential solar installers another “tool in their sales toolbox” when speaking with potential solar customers.
As installers continue educating potential customers on the IRA’s benefits, the bill offers a viable (and, in some instances, the only) route for homeowners to afford to install a rooftop solar PV system in areas of the country without incentives.
Sorting Out the Solar Supply Chain
While the IRA has reinforced the foundation for the solar industry’s future, the immediate horizon also holds promising signs.
Last year, the pandemic’s lingering repercussions created uncertainty in global supply chains, as corporate logistics teams in nearly every sector faced increased shipping and raw materials costs. However, new reports indicate these supply chain issues alleviating as early as Q2 2023, fueled by declining prices for global shipping and polysilicon, a major component of solar module manufacturing. Additionally, analysts forecast global polysilicon production capacities to double by the end of 2023, reaching 536 GW and potentially lowering raw materials costs even further.
Trina Solar US Advantage is Here for Homeowners…And Installers
To assist in this expected surge in residential solar deployment, the Trina Solar US Advantage makes the job easy for installers. This smart residential solar solution gives installers access to our dedicated module supply of the compact but high-powered Vertex S+ from our manufacturing bases in Thailand and Vietnam. As part of the Trina Solar US Advantage, each residential PV module comes automatically covered by our industry-leading TrinaProtect warranty program for 25 years of guaranteed product performance and power generation. Even long after installation, the local Trina Solar US team provides ongoing support for installers and suppliers to ensure lasting solar project value.
We see 2023 as a year of even more sustained solar growth, and we can’t wait to partner with you to break even more residential PV installation records!
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