As the world continues to spin, it seems like each year humanity comes up with a new, clever way of harnessing the power of the universe. As far back as the 7th century B.C, however, humans have harnessed solar power and energy for use here on Earth.
Beginning in the early 2000s, the adoption of solar energy in the US began to take off. In fact, its production of solar energy increased by almost 50 times between 2008 and 2018—just ten years. When considering the earliest forms of solar energy (i.e. cavemen using glass to create fire), this most recent trajectory shows a promising development for its potential widespread use.
Bad News Bears for Oil and Gas
While there are many factors which differentiate resources like oil and gas from solar energy, one stands out among the rest: these resources are finite. Unlike the unlimited power produced by the sun, as early as the start of the 1900s, national leaders feared shortages. Of course, at that time, the US still hadn’t discovered a significant number of the oil fields that it has today.
Nevertheless, OPEC’s 1973 oil embargo spelled bad news bears for Americans who were heavily reliant on oil. Moreover, the harsh winter of 1977 led to massive natural gas shortages. As a result, President Carter formed the Department of Energy whose sole focus was exploring alternative energy options. Since then, the playing field in the energy market has seen the introduction of many new players—none quite as promising as solar energy.
Politics and Alternative Energy
A major factor shaping the landscape of the energy industry is, of course, politics. In the past few years, the US has suffered a trade war with China, leading to expensive tariffs on aluminum and steel which are essential to the survival of energy production companies.
As more information on the growing climate crisis becomes widely available, many Americans are looking to their elected leaders for a solution. Not coincidentally, the government has enacted key policy changes incentivizing increased production and adoption of renewable energies like solar power.
In 2006, the United States government passed the Solar Investment Tax Credit (ITC). With this legislation, businesses or individuals who invest in the creation of “solar facilities” receive a federal tax deduction on the cost of their project.
Any solar projects that begin in 2020 will receive a 26% tax deduction on the cost. Projects started in 2021 will receive a 22% deduction and any commercial projects started in 2022 or after will receive a 10% deduction. Beginning in 2022, the ITC will no longer apply to residential properties.
The Future is Solar
The public discourse is now shifting from saving the oil and gas industry to growing the renewable energy sector. Solar and wind energy are now the primary focuses of companies and policymakers looking to keep up with the times. While oil and gas industry leaders would have to make significant investments in adapting their plants and equipment to be able to harness solar power, the long-term cost of solar energy production is substantially smaller than traditional methods.
When comparing wind and solar power, the two major forms of renewable energy, solar stands out as the easiest energy to adopt. Because wind turbines must stretch substantially high into the air to generate the required amount of power, they are impractical for residential use. On the other hand, both commercial buildings and residential properties can install solar panels quite easily. Although they lose the valuable nighttime hours for power generation, the sheer number of solar panels which we can install may make up for this altogether.
Although it has a long way to go in dominating the entire energy industry (oil and gas still maintain an 80% market share), solar energy may soon be the biggest player in the renewable sector. While wind power had a larger market share in 2019 (24% vs solar power’s 9% share), solar energy’s practicality and adaptability hints that it may be the dominant renewable source by 2023.
At The Solar Guys and around the world, the future is looking up—literally!