The residential solar industry forecasts a record 2022
The U.S. is expected to install a record amount of residential solar panels this year — driven by rising electricity prices and the recently signed landmark climate bill.
What’s the big deal? Payback periods on solar panels have varied over the years with fluctuating electricity prices and an inconsistent availability of tax credits.
The bill gives more certainty around tax incentives for both consumers and businesses — reinstating a 30% tax credit on residential solar systems, which lasts until Dec. 31, 2032. The credits continue but drop until they disappear in 2035, unless Congress continues it. Domestic manufacturers will also benefit from tax incentives:
- This is the first time the entire supply chain — from manufacturers to end consumers — is benefiting, per the CEO of the largest U.S. solar panel manufacturer, First Solar.
- Yesterday, First Solar (NASDAQ:FSLR) announced plans to invest $1.2B to expand new and existing domestic U.S. manufacturing facilities.
Time to go solar: Installation of residential solar is expected to be three times greater than the amount of commercial installation this year. And the incentives couldn’t come at a better time.
- Rising natural gas prices led to surging U.S. utility prices — with an estimated 20M U.S. households behind on utility bills.
- Extreme weather conditions and energy shortages are pressing the nation’s power grid — leading to more blackouts.
Solar manufacturers have struggled to meet demand, given supply chain issues. First Solar said it’s sold out through 2025, and plans for a new factory in the Southeast should help meet demand.