Challenges Facing The Solar Industry Right Now

The solar industry is poised for growth. Solar energy is one of the most viable alternative energy sources, with its unlimited abundance and potential. During the next decade or so, experts anticipate more widespread solar development and employment. The industry has already reached record numbers. Though the solar industry outlook is positive, it must face certain challenges in the near future.

One major concern is efficiency — solar panels only convert a small percentage of the available solar power into usable energy. Solar’s reliability is also an issue, especially in certain geographic regions. Though solar’s overall environmental impact is positive, especially compared to non-renewable energy sources, a few environmental concerns are still relevant, as well. In addition, the industry should reduce reliance on ever-changing political landscapes and their varying focus on sustainability projects. After addressing solar energy challenges, the industry will see unprecedented growth.

Current State of the Solar Energy Industry

The solar industry has reached record highs in the last few years. Reduced costs, government incentives and widespread environmental concern have led to a boom in solar demand. By the end of September 2020, the United States had installed 67.9 GigaWatts alternating current (GWac) of solar photovoltaic systems. Photovoltaic modules and cell importations are higher than ever before. In the first nine months of 2020, imports reached 20.6 GigaWatts direct current (GWdc) photovoltaic modules and 1.7 GWdc for cells. Keep in mind that this growth is in spite of the COVID-19 pandemic and its effects on the economy. With economic health restored, the industry’s expansion could skyrocket.

Despite the industry’s recent growth, it faces several significant challenges. Improvements are necessary for efficiency, reliability, environmental impacts and reliance on government policies. These concerns may limit the industry’s potential, so finding solutions is vital.

Solar Power Efficiency

Even with recent technological advances, solar efficiency has ample room for improvement. The average solar panel is only 17% to 19% efficient. This efficiency rating refers to how much available solar energy the panel can convert into usable energy. In other words, 83% to 81% of solar energy goes to waste. Though a solar panel in a desert might absorb several kilowatt-hours of energy, it converts only a small fraction to usable energy.

Experts are racing to improve solar panel efficiency. Increased efficiency could reduce solar costs for manufacturers, retailers and consumers since fewer panels would be necessary to provide the same level of power. This would also contribute to the industry’s environmental friendliness, as solar generation would take up less space and manufacture would require fewer resources.

Improving solar cell efficiency is one of the most significant opportunities for those in the solar industry. Technological enhancements are on the horizon. For instance, the introduction of diamond wire may result in thinner solar cells, which will be less expensive to produce and transport. Another opportunity is passivated emitter rear cell technology, which reflects unabsorbed light, converting more light into energy. Those at the forefront of solar efficiency improvements will have the greatest competitive edge as the industry expands.

Solar Power Intensity

Another notable concern for solar developers is varying solar intensities. The amount of energy the sun provides differs by region and time of year. For instance, Southern California, Arizona and New Mexico receive over 5.75-kilowatt hours per day of solar energy on average while most of New England receives less than 4-kilowatt hours per day. In addition, the continental United States receives much more solar energy in July, the hottest month in the Northern Hemisphere, than it does in December or January.

Varying solar intensities means solar is much more effective in some regions and parts of the year than others. In Washington, Maine, or Minnesota, it will take a lot longer to reconcile a solar investment. For now, solar is only viable in certain geographic regions, which limits the industry. The average cost of solar is not worthwhile in many regions, including the northern half of the continental United States. If panels continue to become more effective and less expensive, residents of these areas will have a greater incentive to invest.

Solar Power Reliability

One of the challenges for solar energy is also reliability. Even in the country’s hottest regions, panels can only produce electricity for a maximum of 12 hours per day, with short efficiency peaks at midday. Solar technology professionals are devising ways to improve reliability. For instance, tracking panels follow the sun to extend peak energy production. Storage batteries are another possible solution — they would store some energy throughout the day for use at night. However, improvement is still necessary.

Solar developers need to create more effective and reliable solar technology. Until then, it’s unlikely solar will become a primary source of energy throughout the United States’ northernmost regions. However, solar is already more reliable than many other forms of energy. Solar facilities include many separate panels, spread out. Should a storm or other event damage one panel, the remainder can still function. When a disruptive event damages a generator or transformer station in a centralized grid, large populations can lose power. Widespread solar usage would improve emergency preparedness.

Solar manufacturing is also more reliable than most other energy manufacturing. Manufacturing other energy sources, including both fossil fuels and alternative energy solutions, require a great deal of water. Sourcing and using fossil fuels requires a lot more water than solar energy. Other alternative energy forms, such as nuclear and hydraulic, depend on mass quantities of water.

Solar panel creation requires smaller amounts of water and collecting solar power requires no water at all. This makes solar a more resilient choice in the event of a drought. Solar industry growth may help communities prepare for disaster events such as storms or droughts. Still, solar’s reliability requires further development.

Solar Power Environmental Impact

Solar power solutions and other alternative energy solutions help to reduce greenhouse gas emissions, which can help stabilize global temperatures. As solar energy becomes wider-scale, reliance on fossil fuels reduces. And running out of solar power will never be a concern. Solar power is the most abundant resource on planet Earth and totally inexhaustible. In one and a half hours, the sun’s energy that reaches Earth exceeds yearly worldwide energy consumption. This makes it one of the most viable solutions for replacing fossil fuels and natural gas. Though solar power provides many positive environmental benefits, it presents some environmental challenges, as well.

Solar’s Land Requirements

One major environmental concern is the space solar panels require. Large-scale solar power operations take up a great deal of land, allowing nothing else to share the space. This can result in habitat loss for both plant and animal species, which is a major source of wild species extinction. It can also limit agricultural development. The solution for this is improved effectiveness — if each panel is highly effective, fewer panels will be necessary and solar power operations will demand less space

Chemicals Used in Manufacturing

Another concern is that solar cell manufacturing often includes the use of several toxic chemicals. These chemicals pose health and safety risks and have negative environmental impacts. Such dangerous manufacturing chemicals include:

  • Sulfuric acid: Sulfuric acid, composed of sulfur, hydrogen and oxygen, is acidic and corrosive. It’s a defining chemical of acid rain. Because it’s so corrosive and reactive with water, sulfuric acid is a dangerous chemical that can cause severe injury. Exposure can cause irreversible burns, organ damage or death. Inhaling mists containing sulfuric acid can cause throat and lung cancer. Exposure to small amounts of the chemical can cause numerous negative effects in humans and other animals. This has serious environmental implications. Since sulfuric acid is so dangerous, it’s best to reduce its use in manufacturing whenever possible.
  • Hydrochloric acid: Like sulfuric acid, hydrochloric acid is corrosive and can damage a person’s skin, eyes or other organs. Handling it requires extensive personal protective equipment, including a full-body suit and a vapor respirator. Hydrochloric acid is one of the chemicals released in fossil fuel manufacturing. Along with sulfuric acid, hydrochloric acid can cause ecosystem changes and harm wildlife. Its reduction could lead to a cleaner, more stable environment.
  • Nitric acid: Nitric acid is another dangerous chemical common in manufacturing. Contact causes irritation or burns. Inhalation can cause dry throat, shortness of breath and long-term lung damage. When released into the environment, it can damage plants and animals or lead to long-term human health concerns. Finding alternatives for nitric acid is a major environmental concern.
  • Hydrogen fluoride: Hydrogen fluoride, when dissolved in water, is called hydrofluoric acid. It’s most often used to create refrigerants but has other manufacturing purposes, as well. Exposure to hydrogen fluoride or hydrofluoric acid, even in small amounts, can cause cell damage, severe burns or lung swelling and can be fatal. Those who survive can experience chronic effects. Using less of this chemical would improve human and animal safety.
  • 1, 1, 1-Trichloroethane: Also called methyl chloroform, 1, 1, 1-Trichloroethane is a dangerous, ozone-depleting substance subject to rapid government phaseout. Its inhalation or ingestion can cause effects similar to those of alcohol poisoning. Exposure can also cause skin irritation, organ malfunction and birth defects. Its creation and use will soon be illegal in most of the world.
  • Acetone: Acetone is an odorous, flammable liquid found in nail polish remover and paint thinner. The human metabolism produces and disposes of acetone. Though much less toxic than the other chemicals on this list, acetone is an irritant and high levels of exposure can cause health concerns.

These chemicals can be hazardous to humans and other living things. Minimizing their use in manufacturing and opting for less toxic alternatives is critical. Those involved with solar panel manufacturing have an important opportunity to improve their processes by using fewer toxic chemicals. This would make solar power even cleaner, offering increased environmental benefits.

Despite these environmental concerns, solar energy is much safer and less detrimental than non-renewable energy sources. Fossil fuel production causes mass amounts of greenhouse gas emissions in addition to releasing toxic chemicals into the environment. Though solar power needs some improvement, it’s a better energy solution than current prevailing methods. Investing in improvements to the environmental impact of solar power will benefit humanity long-term.

The Effect of Government Policies on the Solar Power Industry

Political landscapes are ever-changing, and they have a significant impact on the solar industry. Tax breaks, subsidies and tariffs affect the industry’s supply and demand. The industry needs independence — since government policies are not predictable or reliable long-term, too much reliance on them could be detrimental. As government incentives expire, the solar industry needs to sustain solar’s high demand.

For instance, the United States Congress passed legislation offering a significant solar tax credit — 30% for panels installed before December 2019, 26% for panels installed in 2020 and 22% for panels installed in 2021. Unless Congress renews it, this tax credit will expire in 2022. Its expiration could lead to a massive decline in demand. Solar panel retailers need to start focusing on solar’s other selling points without relying on the tax credit to attract buyers. Solar provides homeowners with many other benefits beyond reduced taxes — for example, solar power results in decreased energy bills and contributes to reduced grid reliance.

The Future of Clean Energy

Though the tax credit is set to expire, the next few years should be positive for the United States’ solar industry under the current administration. President Biden has pledged to invest record amounts of money into clean energy research and implementation and plans to incentivize clean energy across the economy. He has set a goal to reach net-zero emissions by mid-century. With Congress’s cooperation, the government may enact new tax incentives, perhaps even more attractive than the 22% to 30% tax credit.

Even still, it’s important for the solar industry to establish independence from such government programs. Solar manufacturers, retailers and installers should focus on promoting solar’s other benefits. Industry growth needs to become reliable regardless of government programs. Otherwise, expiring tax incentives could hinder demand.

Dataforma Understands Solar Industry Needs

Like any young industry, the solar industry has a set of obstacles before it. Increased efficiency and reliability are major priorities. Other concerns include environmental impacts and reliance on government programs. There are many opportunities for improvement, and the potential for growth abounds. Solar industry professionals will need to focus on technological advancements and expanding solar’s benefits. Now is the time for solar manufacturers, distributors and installers to establish their place in the budding industry.

One way to improve your solar operation is by using an all-in-one project management solution. With Dataforma’s user-friendly software, you’ll have all the tools you need for effective project organization, scheduling, communication, lead management and day-to-day operation. Dataforma is the leading solar business software for both office and field use. If you’re looking to elevate your solar industry business, consider Dataforma. To learn more about how Dataforma can help your business, schedule a free 15-minute demo today.


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