The Number of Solar Projects Will Continue to Grow

There is good news for the solar power industry within the coming years. Multiple reports suggest that the industry will continue to grow in terms of the number of utility-scale projects, but will not mirror the rapid growth seen in the past five years. The SEIA reported in 2016 that there were approximately 15,000 solar farms in the United States. About 10,000 solar farms are under construction and roughly 30,000 solar farms are in the development stages. Smaller solar developers might face some pressure due to the decrease in activity but larger developers shouldn’t have a problem, leading to a steady industry growth towards 2021.

Solar Farm Development Creating More Jobs than Coal and Oil Combined

One of the indicators of the solar industry’s projected growth is the employment rate. The solar energy industry has come to employ more people than the coal mining and oil extraction industries combined. The solar industry’s main employees perform construction work and physical installation, meaning these jobs cannot be outsourced to other countries. For this reason, the solar industry has seen such a massive increase in employment and will continue to do so.

4 Reasons Why the Solar Industry Outlook is Good

Thanks to various factors, the solar energy industry will see a decrease in the price of materials sourcing and capacity to supply the demands of their downstream customers. Rapidly developing and financially optimal technology will drive down the cost to build a solar farm. Solar power developers will be able to obtain this technology at lower prices and widen their profit margins. Electrical power consumption will continue to increase steadily and the industry’s reliance on government incentives will start to wain as solar companies find it easier to compete. Because of these factors the industry will see revenues increase at an annualized rate of 18.7% until 2021. To take advantage of this growing industry, landowners should determine the viability of their property for solar power lease agreements.

  1. New Technology Brings Cost Savings and Efficiency to the Solar Industry
    There are two ways that solar power plants can function, as concentrated solar power plants or photovoltaic systems. CSP’s take concentrated sunlight to heat up water, making steam to power things like turbine generators. PV systems harness sunlight in solar cells and are directly converted to electrical energy. The price of PV systems has made utility-scale projects using PV systems costly. However, the industry is constantly working to increase the efficiency of the cells and decrease the cost to produce them. In 2016, scientists in Hong Kong combined an inexpensive and high-performing substance called perovskite with other photovoltaic materials to create the world’s most efficient “tandem” solar cell. This cell performed at an efficiency rate of 25.5%, the highest on record. Although perovskite contains high amounts of lead, if used in combination with other materials, it is safer. We will continue to see outstanding advances in technology such as these which will make commercial viability of a solar-driven world more realistic.
  2. Decreased Costs
    With the advent of new technology, the solar industry has seen some genuine savings in operational costs with more potential for soft costs to decline as well. Specifically, semiconductor and crucial electrical mechanisms necessary for a solar farm to function have continued to decline steadily since 2012. The solar panel manufacturing industry has continued to decrease their prices in the past few years which will allow solar power companies to purchase them at lower prices, subsequently increasing their profit margins. Like every new industry, soft costs start out high while companies find their footing. Acquiring new customers, labor, and navigating government regulations through inspections are all expected to decrease. In 2015, Berkeley labs reported that the cost for large utility scale solar farms decreased 12%. The cost will continue in this downward trend which will spark genuine competition between solar power and traditional energy sources.
  3. Electric Power Consumption
    The energy industry association predicts modest growth in demand for electricity in the coming years. Electric power consumption affects all types of energy industries. An increase in demand for electricity will always equal an increase in demand for solar energy. Since electrical power consumption is expected to grow modestly it will affect the demand for solar in the coming years.
  4. The Industry Will Become Less Reliant on Government Incentives
    Two important government incentives have driven the solar economy in the last five years: the Renewable Portfolio Standard and the Investment Tax Credit. The RPS required that a percentage of energy generated by utility companies come for renewable energy sources. The ITC was implemented to ensure the continued investment in solar power throughout the recession. A few years back, the ITC was extended until 2019 for solar industry operators. After 2019, the ITC rates will begin to decline. Thankfully, even with the uncertainty in alternative energy wrought by the new administration, the solar industry will become less reliant on government incentives in the coming years. Because of the declining costs for solar technology manufacturers drives the price down for solar power operators, in turn making solar energy a more sustainable and financially beneficial market. 

How Does A Positive Outlook for the Solar Energy Industry Affect Landowners?

Leasing land for renewable energy purposes provides landowners with ongoing revenue while providing a sustainable way to ensure the quality of our environment for future generations. Revenue growth for the solar power industry is a good indicator for property owners if the industry will be seeking out ground leases. The revenue for the solar power energy industry is projected to reach $11,143 million dollars by 2021.

  1. Agricultural Landowners Can Save Money or Make Money Through Personal Solar Farms or Solar Lease Agreements
    Whether adopting solar energy to power their farm or through a ground lease, more agriculture industry operators are warming up to solar. Because of the declining price for photovoltaic technology, farmers can realistically use solar energy to power their farms. The world’s growing need for food means that cost-effective energy will be crucial to maintaining farm operation costs low. Furthermore, the increase in profit margins for solar energy manufacturers, means that the increase in solar power lease agreements will financially benefit farmers with extra parcels to let. In some cases, small farms cannot make the amount of money per acre growing crops that they could leasing to a solar company. To keep their land in the family and continue to farm, a solar power lease agreement could keep farms in business.
  2. Landowners Can Lease Land for Solar Farm: Lower the Barrier to Entry for Industry Operators and Generate Ancillary Income
    The availability of land is a significant barrier to entry for solar power operators. Private landowners can take advantage of this demand for land by establishing renewable energy lease agreements. There are around 30,000 solar power projects in the development stages in the US right now. Even if a small percentage of those projects go through, that is a substantial number of leases available to landowners throughout the country. By leasing your land to a solar power company, you can be a part of a sustainable solution and make money at the same time. With the population nearing 8 billion people, it is crucial that we begin to conserve resources and steward our lands as best we can. On average, only 40% of the land you would lease would be covered by solar panels and sliver of that is used for solar equipment installation, meaning you can use your land for multiple purposes. Moreover, landowners can negotiate for a decommissioning agreement which would safeguard the land’s future conditions. This decommissioning agreement means that the solar company must return your leased land back to its pre-existing state.

If you are looking to lease land for a solar farm, you can list your property for free on our site. If your property is chosen by a company interested in a lease agreement, we will negotiate on your behalf, and only take a percentage of the deal if it is accepted by both parties.