Covid-19 has been a major disrupting force worldwide, crippling economies, disrupting trade, consumption patterns, and altering work arrangements. While these changes have had devastating impacts on an aggregate scale, not all industries have been hit the same.
The solar industry has actually benefited from the disruption. The industry is positioned to make significant market gains in the next few years, thanks to record low-interest rates and the growing burden of utility bills on consumers.
Increased Home Energy Consumption
One of the most prominent societal changes Covid-19 catalyzed was the shift to working and schooling from home. As a result of mass lockdown orders, people spend increasing amounts of time in their residences.
This was initially touted as a positive environmental side effect of Covid-19, as it significantly reduced commuting, commercial, and industrial pollution. Unfortunately, these reductions have been offset by a 16% increase in residential electricity usage, demonstrating the lockdowns to have merely shifted the source of pollution.
Electricity usage from Monday to Friday now matches that of the former weekend peeks.
Homeowners, not corporations, are paying these increased energy costs, which will catalyze solar energy growth as people look to cut their energy bills. One individual has seen their electricity usage skyrocket 31% since the pandemic first began.
This is problematic, as most households have had their purchasing power reduced in the last few months. Even after the pandemic is eventually brought under control, mixed-use work formats are likely to remain commonplace, meaning the problem of increased electricity consumption for homeowners won’t be eliminated alongside the virus.
Rising Cost of Electricity
Compounding this problem is the rising cost of electricity per kWh, which is largely a result of degrading energy grid infrastructure and the growing costs of fossil fuel and nuclear power plants.
Lower Interest Rates
In an effort to soften the economic damage of Covid-19, The Bank of Canada and Federal Reserve have dropped interest rates to historic lows. Both monetary institutions have also provided guarantees that interest rates would remain low for the foreseeable future.
The Bank of Canada has gone as far as freezing the nation’s interest rate for the next five years at 1.99%. This is good news for homeowners, as it gives them an excellent opportunity, driven by cost-effectiveness, to make the switch to solar power.
Despite improvements in solar technology, namely panel durability and efficiency, which have led to price reductions, most homeowners remain unable to pay the technology’s upfront costs. Instead, the vast majority choose to finance their installation through personal loans, home equity loans, property assessed clean energy loans (PACE), home equity lines of credit, or other options.
Financing choices differ depending on location, so it’s essential for homeowners to research which options are available to them and what works best for their unique situation.
Regardless of how one chooses to finance their solar installation, historically low interest rates give homeowners the flexibility to pay off their solar panels in the long run. For many, the panels will pay for themselves through utility savings. This is especially true for homeowners who can claim government-issued solar incentives.
Improved Solar Panel Technology
Solar panel technology is in a constant state of innovation with new advances announced constantly. In the past year alone, there have been milestones in efficiency and design technologies.
A number of achievements by various panel manufacturers have brought us to higher and higher maximum efficiencies than in previous years.
The solar cell types used in mainstream markets have seen major improvements in cost per watt – a metric that compares relative affordability of solar panels. Increased efficiency and product design mean a lower cost for better-performing panels, which means improved ROI.
The combination of increased residential electricity consumption, rising utility bills, improved solar panel quality, and extremely low-interest rates make solar energy the perfect investment for homeowners looking to save money. Consequently, the solar industry is primed for significant growth heading into the future.
Homeowners, cleantech professionals, and sustainable investors all have good reason to celebrate the direction that solar energy is heading in and for the industry’s latest momentum.
Let us know if you are interested in installing solar panels. We have a no-obligation assessment process that provides you with all the information you need to make an educated decision.