10 solar, storage and energy predictions for 2024

Recently, a US institutional expert published some forward-looking predictions for the US market in 2024, adding a prediction for electrification in 2024 to the usual predictions for solar and energy storage technologies.

 

Just as tax breaks accelerated the development of the solar and electric vehicle markets, the electrification incentives in the Inflation Reduction Act (IRA) have begun to drive demand for heat pumps and electrical upgrades. Predictions for 2024 are much more difficult than reviews for 2023. Nevertheless, I will venture here again to propose 10 predictions for 2024.

 

Several of them are particularly noteworthy related to photovoltaics: a sharp drop in household solar revenues, the bankruptcy of major photovoltaic installation companies, and Tesla's possible entry into inverters.

 

 

More and more electric vehicle manufacturers will follow Ford and Tesla and integrate 240V generators in their cars. These generators will enable car owners to use these huge batteries on wheels to power their homes, both in daily situations and when power outages become increasingly frequent. Smart drivers will learn to charge their cars cheaply during the day and then use the car battery to power their homes during peak electricity demand at night.

 

 

Sales of heat pump HVAC and water heater systems will surge 25% in 2024, limited by equipment supply and contractor resources. Although IRA rebates for these systems are still not in place due to delays from the U.S. Department of Energy and state energy offices, customers are purchasing these products due to market awareness established by the IRA. Customers are taking advantage of the tax credits and local incentives currently available for these devices. In some cases, these measures can cover more than half of the total installation cost.

 

 

The IRA provides strong incentives for electric vehicle, solar, energy storage and heat pump manufacturing in the United States. However, the rules for applying these incentives to manufacturing plants and projects are very complex.

 

Although more than 60 manufacturing plants have been announced, less than half of them will actually be put into full production once the incentives and supply chain details are understood.

 

 

The end of California’s net metering policy will prompt utilities in other states to restrict the development of rooftop solar and energy storage. A dirty secret is that utilities can use taxpayer funds to influence state politicians to eliminate competition from rooftop solar and essentially achieve a monopoly.

 

Laws that restrict utility lobbying are difficult to pass because utilities spend tens of millions of dollars lobbying against them.

 

 

California’s residential rooftop solar revenue will plummet by 50% in 2024 compared to 2023. Although California’s electricity bills are still increasing at a rate of more than 10% per year, the state is unlikely to regain its lead in solar until net metering is restored.

 

Customer anger over skyrocketing electricity bills and the end of net metering will backfire on politicians who have accepted millions in donations from utility interest groups over the past six years. Once voters tie their electricity bills to the lobbying funds of state representatives, relying on the financial strength of power companies to get re-elected will no longer work for politicians.

 

 

Continued financial losses by national solar installation and finance companies will lead to the bankruptcy of at least one high-profile company. The financing business model of large residential solar companies is very sensitive to interest rates. Solar financing companies borrow money for PPAs and leases at relatively short terms to fund their development and then receive returns over longer PPA or lease terms.

 

When interest rates soar, they cannot maintain profits due to reduced revenue and higher borrowing costs. In 2025, interest rates will fall sharply. At that time, average electricity costs will be higher, equipment costs will be lower, and the solar financing market will rebound.

 

 

With the entry of Tesla hybrid string inverters, the inverter duopoly of SolarEdge and Enphase will become a triopoly. Although system performance will be lower without module-level electronics, Tesla will enter the inverter industry with its brand advantage and lower system cost.

 

 

Virtual power plant (VPP) and vehicle-to-grid (V2G) tests sponsored by power companies will continue, but they will not progress without a lot of customer incentives. The underlying friction of these business models is that power companies are unwilling to compensate customers for the full value of battery systems.

 

The reason is simple. If these battery assets are owned by the power company instead of the customer, the power company can get higher profits. The meager funds that power companies are willing to pay for customer site resources are not enough to cover the customer's battery costs, let alone the costs of the installers, manufacturers and integrators of these systems.

 

 

The congested residential battery system business will be consolidated into four national companies. The price of the battery itself is relatively low. On the other hand, it is costly to release a complete, fully UL-certified battery and software system.

 

But this is just the beginning. It costs a lot to establish a national sales and service organization. New entrants into the battery systems space will not succeed without the investment and personnel needed to support customers.

 

 

COP28 showed the world that it is “game over” for fossil fuels.

 

While it will take another generation to make the transition, the economics are the simple reason for the switch. Solar and wind power are already far cheaper than fossil fuels.

 

These renewable energy sources are being developed at a faster pace, while at the same time, clean fossil fuel emission technologies, such as carbon sequestration and storage and direct air capture, are becoming economically unviable. While fossil fuel companies spend billions to expand their operations and continue to pollute the environment, they are doomed to extinction like their dinosaur ancestors.