At the top of Mortenson Construction’s corporate headquarters in Minneapolis sit three solar arrays, generating enough energy to offset 40,000 driving-miles of carbon emissions annually. On the floors below, solar production is tracked and displayed in everyday terms for our team members to see, such as laptops-in-operation or miles-driven.
Solar installations are among a host of measures we have employed since 2009 to increase sustainable practices on our campus. We do this to not only walk the walk, but to express optimism for the solar industry as the alternative energy poised to outpace all others, as it has reached cost parity with coal and natural gas.
And we’re not alone in predicting a bright future for the solar industry.
Recently, Mortenson released the findings from our 2015 Solar Industry Study, a research effort aimed at taking the pulse of the industry. Feedback gathered from over 200 attendees at the Solar Power International (SPI) conference, representing utilities, developers, independent power producers (IPPs), financiers and suppliers, indicated that most industry professionals anticipate a robust future for solar.
Considering that the Federal Investment Tax Credit (ITC) is slated to be reduced from 30% to 10% for commercial properties, this is not an insignificant finding. While most of the conference attendees we spoke to say the 2016 ITC reduction will have an immediate impact on solar activity, 57% of utilities, developers and IPP professionals still believe the long term outlook of solar will still be strong.
Respondents mentioned several factors that would counteract an ITC reduction in the long run, including better financing solutions, falling costs and continued innovation in energy storage. Industry cost reduction is driving much of the optimism regarding future trends. The price of utility-scale solar has fallen by more than 70% since 2008, according to the Lawrence Berkeley National Laboratory.
Respondents strongly believe that electricity storage, including the massive battery plant being built by Tesla Motors Inc. in Nevada, will be a significant game-changer. Other infrastructure developments lending solar a potential boost include distributed generation, net metering and smart-grid technology.
Lastly, there’s a feeling that the current ITC will be extended, in the same manner as the Production Tax Credit for wind projects has been extended in the past.
What was true in previous years should ring true for solar developers attempting to secure a power purchase agreement: Due diligence is key, according to utility professionals.
There continues to be a palpable optimism around solar energy, it is already at grid parity in many markets. Even a glut of natural gas available at low prices is not seen as a significant threat to renewable energy. Two-thirds of utility, developer and IPP respondents believe solar electricity has or will achieve the same megawatt-hour costs within the next five years.
Of course, the lynchpin to any growing industry is the people behind it. According to our findings, solar is attracting a wide influx of professionals. Of those we surveyed, one-third have worked in renewables for three years or less. Meanwhile, industry participants with 10 years or more under their belts have worked–on average–at at least two firms, indicating a fluid renewables workforce presented with an abundance of opportunity.
What forces will shape the industry in a year or five years from now? At this point, we can only guess. But if the passion and commitment felt across the industry are any indication, a more secure and sustainable energy future is close at hand.
This article is contributed by Trent Mostaert, the Vice President and General Manager of Mortenson Solar and Emerging Renewables Operating Group. Trent has helped grow Mortenson into the largest full service EPC provider in the nation. He is driven by a desire to continuously eliminate waste from processes and develop innovative ways to consistently deliver far superior results to customers.
