Top 10 Solar States to Watch

Where are homeowners most interested in residential solar power?

By Scott Mueller, Special to SolarWakeup

Residential solar is the fastest and most steadily growing market segment with year on year growth well over 50%.

Over the last few years the solar industry has come a long way, as illustrated in the recent SEIA US Market Report. Numerous residential solar installation companies pepper the Inc. 5000 fastest growing companies list, and the successful IPOs of SolarCity and forthcoming Vivint Solar reflect this growth and optimism. We think the best is yet to come.

The megawatt question is where will we see new residential solar growth in the coming year?

In states like California the right mix of policy, market conditions, and consumer interest show how the market can grow quickly and sustainably, and California shows no real signs of slowing. As solar begins to reach the mainstream, and 92% of Americans want more solar, we all want to know which states represent the next wave.

So we did a little data crunching on our own residential solar lead data from the last eight months. We call it the “US Solar Combine”, where States are ranked in three events:

“Strength” – Top states by total solar lead volume
“Passion” – Relative interest level in solar power (ratio % of leads/% of population)
“Speed” – Fastest rate of solar lead growth in the first 8 months of this year.

Then we took an aggregate score of all three events to crown the overall champion. You’ll be surprised to see how they stack up.

#1. STRENGTH: Top State by Total Lead Volume

The first test is brute strength—who’s got the most interested homeowners?

Here we’re looking at the relative percentages of residential solar leads by state in the USA, which is of course heavily influenced by population (bigger states will generally have more leads). So the Golden, the Lone Star, the Sunshine, and the Empire states live up to their big names and take the crown as the strongest states by lead volume.

But if California represents about 50% of the residential solar market and only 10% of the lead volume (much more in line with population), then doesn’t this say that people across the country are roughly equally interested in solar? We think that with the right long-term strategies in place, Texas, Florida, and New York would easily rise to become some of the major markets. New York is already taking big steps to become a major solar market, while Florida and Texas have alternated between glimpses of their true potential and stumbling. The people have spoken, so let them have solar.

Winner: California, the Golden State

Runner-Up: Texas, the Lone Star State

#2. PASSION: Top ranked states by “interest”

The second test is more nuanced—what state has the most solar passion?

It’s not surprising that California is the largest lead volume state, so we needed a measure of how many people are saying, “I want solar,” compared with that state’s population. The higher the score, the greater the relative interest level in solar.

This is calculated as % of residential solar customers divided by % of population. This is an indication of the latent demand for solar, with “1” meaning equal percentages of people want solar and who live in that state (e.g., (10% of the total leads) / (10% of the US population is in that state) = 1). Simply stated, the greater the value, the higher the concentration of people who want solar.

Nevada, New Hampshire, and Maine have a much higher proportion of people that are interested in solar than say New Jersey or Louisiana. While there are robust solar markets in states with lower “solar passion scores,” this test points out some of the true outliers in public opinion.

Winner: Nevada, the Silver State

Runner up: New Hampshire, the Granite State (or Live Free or Die)

#3. SPEED: And the fastest growing states are…

The third test was outright speed—which states are seeing the fastest rate of lead growth?

The more mature markets saw rapid growth; in fact, over the first half of the year, interest in solar as seen by number of residential solar leads has almost tripled! But some markets are clearly winning the 40-yard dash: Nevada was the Usain Bolt of solar interest with an almost 600% increase in interested homeowners from January 2014 to August 2014. Florida was well over 300% growth, and all of the top 10 states clocked in over 250% growth. And all of the states with a significant lead volume at least doubled in lead volume. This is pretty monumental and suggests that indeed the biggest solar wave is yet to come.

Winner: Nevada, the Silver State

Runner Up: Florida, the Sunshine State

RESULTS: Combined scores in each of the three disciplines

So far we’ve seen California take the crown as the “Strongest” state, but Nevada had the most “Passion” and was also the “Fastest.” As with any combined event, it’s all about how you did in as many events as possible. The results of our three disciplines and the combined ranking are posted in the table below as well as how SEIA ranked the states in 2013.

Nevada, the Silver State, eked out the first place position by winning two out of three events. However, Florida, the Sunshine State, managed to snag second place based largely on their strength (third, just behind Texas) and speed (second). To boot, Florida ranks third in terms of solar potential in the USA (according to SEIA). California lands in third, just barely edging out Texas. Virginia wraps up the top five, with Illinois, New York, Maryland, North Carolina, and Pennsylvania rounding out the top ten.

With over half of all residential solar installations in California, new state markets represent the next major growth opportunity for a sustainable, healthy, and growing U.S. solar market.

This data was collected and analyzed by Solar Lead Factory, a solar-focused residential lead generation business leveraging online marketing strategies. The analysis here was based on a data segment of comprehensive US-based web traffic.

The views and opinions expressed on this web site are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of SolarWakeup.com, and/or any/all contributors to this site.

Wall Street and Main Street Voted. Clean Energy Won.

Wall Street and Main Street Voted. Clean Energy Won.

By Jonathan Silver, Special To Solar Wakeup

“Wall Street and Main Street have voted. They voted for a clean energy economy. As any good investor knows, you back your winners.”

When Congress returns after Labor Day, it will pick up the debate over the clean energy provisions (like extending the production tax credit, clean energy depreciation benefits and alternative fuel tax credits) in the tax extenders package. But, as in so many areas, Washington is behind the curve.

The debate is over. Clean energy won.

What Americans want is clear. Despite the histrionics on Capitol Hill, the disdain of the fossil fuel industry and the misplaced focus by the media on the politics of the fight, clean energy is on its way to becoming the dominant form of power generation in this country.

The trend is unmistakable. According to Bloomberg New Energy Finance, wind, solar, geothermal, biofuel and hydro now generate 13% of the energy we use. Nuclear adds another 19%. Almost a third of all our domestic power now comes from carbon-free and renewable sources.

Since 2007, US coal consumption, driven largely by the lower cost of natural gas, has fallen by more than 20%. New EPA regulations, based on the social, or true, cost of carbon, will further reduce the use of coal. This, too, will increase the use of renewables.

Natural gas, is, itself, becoming more expensive relative to renewables. The cost of fracked gas is already increasing as regulatory protocols are established and infrastructure and transport costs increase. Just ask New England homeowners, where natural gas prices spiked six times higher than normal last winter.

At the same time, the cost of renewables continues to fall. Solar panel costs have fallen by more than 70% in the last 5 years and panel efficiencies are increasing. New panel composites, wind turbine designs, and battery storage chemistries are reducing manufacturing costs quickly. Installation costs are also dropping.

As costs come down and concerns around energy security increase, public support for renewable energy has grown. A recent poll by Yale University found that 87% of Americans believe Congress should make developing sources of clean energy a priority and 68% think we should regulate carbon dioxide as a pollutant. Similarly, a Gallup poll found that more than 70% of all Americans thought the US should put more emphasis on solar and wind energy production. By contrast, only 31% believe we should focus more resources on coal.

The data is even more pronounced by cohort. A League of Conservation Voters poll found that more than 80% of American youth support an aggressive climate change agenda, with its strong implications for clean energy. A National Council of La Raza poll found that 90% of Latinos favor clean energy over fossil fuel and 83% say that coal and oil are “a thing of the past”. Both groups will play a major role in energy decision-making in the future.

Consumers are speaking with their wallets. There is a 6-month backlog for the Tesla S and the Chevy Volt. With higher CAFE standards pushing manufacturers towards hybrids and EVs, today nearly every car manufacturer in the world offers some form of hybrid or electric vehicle and the US market for hybrid vehicles, the largest in the world, is doubling every 3-4 years.

Why? With no gas bills and lower maintenance, the total cost of ownership of an electric vehicle is now about 1/3 lower than the price of a traditional car. Vehicle range issues are now mostly a matter of perception. Most of the EV’s on the road today can travel more than 100 miles on a single charge, but 99% of all trips in cars are less than 70 miles and 15% are less than 1 mile.

There are also more charging stations than many realize. Recargo, a company providing data on public charging stations, covers over 20,000 locations in the US and Canada. Even Disney World has electric charging stations!

Energy conservation has also gone mainstream. Over 53 million smart meters have been deployed. Building owners increasingly use sophisticated energy management tools to cut costs. Last year, Google bought Nest, a smart home technology company, for more than $3 billion and OPower, a public company which provides consumers with energy use data has a market cap of over $700 million.

The financial markets have taken notice. In 2013, the NEX, a global index of publicly traded clean energy companies, was up almost 54% while the S&P rose 30%. Yieldcos from NRG, Pattern Energy and others have had successful IPOs. Municipal “green” bond offerings are oversubscribed and investors have put hundreds of millions of dollars into residential solar roof-top loan administrators like Renewable Funding and Renovate America.

Wall Street and Main Street have voted. They voted for a clean energy economy. As any good investor knows, you back your winners. Washington would do well to listen to the voters and continue to support this important and rapidly growing sector.

Mr. Silver is one of the country’s leading investors in the clean and renewable energy sector. Most recently, Mr. Silver served as a Senior Distinguished Fellow in Energy at Third Way, a leading think tank. He is the former Executor Director of the DOE’s Loan Programs Office and led the Obama Administration’s $40 billion dollar investment program in alternative energy, financing a wide range of solar, wind, geothermal, biofuels, fossil and nuclear energy projects. He also headed the government’s investment program in advanced automotive technology making significant investments in transmission and electric vehicle manufacturers including Ford, the Nissan Leaf and Tesla Motors.

The views and opinions expressed on this web site are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of SolarWakeup.com, and/or any/all contributors to this site.

A Clean Energy Miracle: My Challenge To Bill Gates

A Clean Energy Miracle: My Challenge To Bill Gates

By Yann Brandt

In June, Bill Gates published an article on his site, gatesnotes, titled “We Need Energy Miracles.” Mr. Gates notes that much like breakthroughs in vaccines have helped create miracles, society needs to drastically increase the amount of spending on R&D in clean energy. Ironically, there are only a few people in the world that could actually generate a true clean energy miracle and Bill Gates is one of them.

Consider the scenario: A scientist develops a solar panel that is 50% efficient, dropping the cost per watt to under $0.30. A 60 cell module would generate close to 800 watts of power. Let’s say that the stability is there, the development and commercialization could cost billions of dollars. This research and development would be meaningless even if a blank check was offered to create such a product and build the factory.

Unlike vaccines, the R&D is not where all of the capital has to go. Energy is generated over decades whereas vaccines have a small per unit cost after R&D is completed. Energy needs long term capital investments way beyond the upfront costs of technology developments, even if the technology innovation qualifies as a miracle. Most of all, energy requires capital stability of the manufacturer that is producing the product to support the long-term nature of the project’s energy production.

Bill Gates is already investing in the R&D miracle, and has done so on multiple occasions, mainly in energy storage including Aquion and LightSail. Both investments were later stage technology investments and neither includes energy production. Not too bad for the richest man in the world, but definitely room for improvement. As some venture capitalists have learned and discussed, there is much to invest in earlier and downstream energy innovation.

In the next era of Bill Gates’ energy investments, it should include a fund to finance new technology projects. The projects should generate a small but positive IRR so that it is not a charity but akin to government backed loans. Instead the fund should ignore technology risk. Since Mr. Gates would be the funding source or major investor in the R&D miracle, it makes all the sense in the world that his project finance fund fully trust the technology.

Making a project finance fund agnostic to technology risk sounds insane for anyone in the finance business, especially if the project returns aren’t out of this world. But for someone like Bill Gates it means an attempt at creating a clean energy miracle. Therein lies the challenge to Mr. Gates. Invest billions in R&D, but allocate billions to a technology risk agnostic project fund, the miracle clean energy really needs.