Americans, take your pick: Massive farms of high-efficiency photovoltaic panels in our deserts, or cheap, inefficient solar cells fastened to every roof in the country?
The above is a slight caricature of the long-running quantity-vs.-quality debate over what the solar industry in the United States should look like. Both scenarios can coexist, of course, but still, some debate exists over which type of technology might push U.S. solar along faster.
One camp argues that efficiency is king: Since there is a limited amount of space where we can realistically place solar panels, engineers ought to squeeze every drop of electricity possible out of a ray of sunshine. Their path forward is relatively clear. Cutting-edge solar cells are capable of converting around 44 percent of solar energy to electricity, but the high cost of that technology limits it to applications like space exploration. Thus, the goal of solar research, according to these experts, should be to bring that tech to huge solar farms that can provide clean energy to the masses.
The other side says that cheap solar technology—I mean really cheap, like a few dollars for a bucket of photovoltaic paint—is the key. They envision a world with solar cells covering sidewalks, cars, luggage, baby strollers, windows...basically everything sunlight touches. These photovoltaics could be pathetically inefficient, say only a few percentage points, but it won’t matter, because the potential surface area they could cover would more than compensate for poor conversion rates.
I first learned about these philosophical differences five years ago while reporting on the topic for another article. At the time, I would have guessed that half a decade’s worth of research and development would have produced a winner by now. But that’s not the case. (They both seem to be winners.)
Both residential and utility solar have experienced incredible growth in recent years. Residential solar, which includes individual setups on rooftops and in backyards, hit a record last quarter, with American homeowners installing more than 300 megawatts of solar capacity over a three-month period. For 2014, residential solar is projected to top 1,200 megawatts of new capacity, about six times the amount installed in 2009.
Falling prices are one of the major drivers of residential solar growth, supporting the “first, make it cheap” theory of solar development. According to the National Renewable Energy Laboratory, photovoltaic panel prices dropped a remarkable 12 percent to 19 percent last year, and for 2014 they are expected to have fallen another 3 percent to 12 percent.
Innovations in financing, such as Mosaic, have also aided rooftop solar. “Third-party ownership arrangements now allow homeowners to lease the panels and agree to buy the power at a set price,” says Michael Barker, a senior analyst with the watchdog firm Solarbuzz. “You can see a 5 to 10 percent reduction in utility bills immediately with no out-of-pocket expense.”
Small installations are only half the story, though. Big solar—such as the 3,230-acre Solar Star project underway in California—is growing, too, despite higher costs for equipment and real estate. Installations for vast solar farms grew by 52 percent between the third quarters of 2013 and 2014, and total capacity has more than quadrupled in two years. In fact, utility-scale solar generates well over twice as much electricity as every residential solar unit combined. This growth provides ample ammunition for the efficiency crowd.
Now let’s take a look at how the government plays into this. At present, large-scale power plants are arguably more reliant on government support than rooftop panels. Most states have renewable portfolio standards, which require them to generate a certain portion of their electricity from solar, wind, or other green sources. Without these rules, many utility companies would have nothing to do with solar farms. Meanwhile, tax incentives for home installations have helped the residential solar industry take off. That market, however, appears to be emerging from this supportive cocoon. More than one-half of the new, record-breaking residential solar installations of last quarter came without financial help from state governments. That’s what low prices can do.
It would be wrong, however, to imagine that residential solar is or can ever be truly free from government intervention.
“All energy markets are dependent on the policy structure,” said Noah Long, legal director of the Western Energy Project at NRDC (which publishes Earthwire). “Even as solar becomes more and more cost competitive, the fate of residential solar depends on state interconnection policies and compensation for homeowners.”
So, what’s it going to be: big farms in open spaces or solar panels on every stationary surface?
“Local jurisdictions will decide for themselves,” says Barker. “The Southwest deserts, with available land and ample sunshine, may favor utility-scale solar. Urban areas may favor rooftop solar with a smart grid system. It’s not an ‘either or,’ but an ‘all of the above.’”
Speaking of “above,” there’s still plenty of room up there. Less than 1 percent of U.S. homes have solar panels. (C’mon America, they’re a bargain.)
onEarth provides reporting and analysis about environmental science, policy, and culture. All opinions expressed are those of the authors and do not necessarily reflect the policies or positions of NRDC. Learn more or follow us on Facebook and Twitter.