More and more people understand the economic benefits that come from solar energy, and it is exciting to be at the forefront of this industry. Perhaps most telling when we look at our firm's history and growth, is the number of our customers who are providing us with repeat business.  In fact, 50% of our sales last year were with customers who already had one array.  What does that mean?  Simply: businesses that do solar, do more solar because they see the cost savings, reliability and goodwill these systems provide.

Obviously, it takes more than repeat business to achieve the kind of growth we have been seeing. Here are a few key trends that we expect will make an impact in 2017 and beyond.

US National Average Natural Gas Price

www.nasdaq.com/markets/natural-gas.aspx?timeframe=1y

The graph above provides important data on recent cost trends that experts are predicting will have a significant impact on electrical costs going forward.  Specifically, this graph shows that the price of natural gas has gone up by 22% in the last 12 months.

 

Click here for short video on Cedar Falls Utility Solar Project

Utilities are Beginning to be Part of the Solar Solution

One trend we find particularly encouraging is utilities embracing solar as part of their generation portfolios.  Many of their customers are asking for solar, and we think that trend will continue.  At the same time, utilities across the country are learning that it is better to offer their own solar solutions than try to buck the trend of rapid solar growth.

There is significant experimentation with the ways utilities offer solar solutions to their customers.  We partnered in 2016 with the Cedar Falls Utilities (CFU) in Iowa to create the largest community solar project in that state. The utility purchased the array and offered the resulting savings to customers who participated in their solar program.  The model made sense for all: the utility, the customers and the environment, and we think CFU's model will work in many other locations as well.

Turn-Key Services

While the benefits of solar are easy to understand, getting a project from idea to execution requires a wide range of expertise.   RER excels at overcoming hurdles and managing the complexity of these projects, with deep competence in design, engineering, financing, legal, and project management, our team brings projects over the finish line.  This turnkey capability has allowed us to grow by serving our clients, and also partnering with other developers to help them complete projects that have gotten stalled along the way.

What about the Change in Administration?

The major federal incentive is the Investment Tax Credit (ITC) that was passed with broad bi-partisan support at the end of 2015, and is set to decline over time already.  As over 80% of the public believes the country should use more solar energy, it would seem unlikely that the administration would have much appetite to change this core incentive. Having said that, the cost of solar has fallen so far, that even if the ITC were to go away, this would not likely meaningfully interrupt the rapid pace of solar growth.  Indications are that the effective cost of energy without federal tax credits would increase from $0.03~$0.04 per kWh to just $0.04~$0.05 for the next 20 to 30 years.  If you consider that most businesses are paying $0.05~$0.10 today, and remember that their current electric price is likely to increase over that same time period, it is pretty clear that solar is here to stay.
 

Sincerely,

Jim Kurtz, President, RER Energy Group