On September 8, 2021, President Biden made a big announcement for the solar industry: solar has the potential to power 40 percent of U.S. electricity by 2035, and 45 percent by 2050 – an increase of over 1,000 percent from where it stands today. Produced by the U.S. Department of Energy (DOE) Solar Technologies Office (SETO) and the National Renewable Energy Laboratory (NREL), the Solar Futures Study served as the basis for Biden’s announcement, explaining the role that solar will need to play in decarbonizing the electric grid and how we can achieve these targets in a cost-effective way. In this article, we’ll answer some of the major questions you might have about this study and what this solar transition could look like.
- Solar could power 40 percent of U.S. electricity by 2035 and 45 percent by 2050
- 95 percent electric grid decarbonization could be accomplished by 2035 without an increase in electricity prices
- The benefits of the clean energy transition will outweigh the costs
- For the transition to be successful, the U.S. must advance solar technology and recycling, increase the solar workforce, and adopt more solar policies
- To be part of the clean energy transition – while saving money – go solar today through EnergySage
What could the solar future look like?
First and foremost, a solar future will include increases in distributed/rooftop solar and utility-scale solar, both of which are modeled in the Solar Futures Study. The study discusses three different scenarios for the future of solar: Reference, Decarbonization (Decarb), and Decarbonization with Electrification (Decarb+E). Under the Reference scenario, the U.S. maintains its current policies and does little to accelerate solar deployment. The Decarb scenario entails a 95 percent electric grid emissions reduction from 2005 levels by 2035 and a 100 percent reduction by 2050.
The main goal of the DOE, however, would be to achieve the Decarb+E scenario, which would include the same electric grid emissions reductions as the Decarb scenario, while also incorporating large-scale electrification to replace some fossil fuels used in transportation, buildings, and industrial sectors. According to the DOE, this scenario “envisions the greatest reduction in emissions in the U.S. energy system by 2050.” The study also includes some preliminary modeling of a “beyond” Decarb+E scenario, involving 100 percent decarbonization of the U.S. energy system by 2050, though this scenario would require significantly more solar deployment.
How will we still have power when the sun isn’t shining?
Solar power needs to play a huge role in the clean energy transition – but as you’re no doubt aware, solar panels don’t produce electricity when it’s dark outside. So, alongside expanding solar, we also need to expand and maintain a number of other renewable energy sources in our decarbonized grid, including wind (36 percent), nuclear (11-36 percent), hydroelectric (5 or 6 percent), and biopower/geothermal (one percent).
Additionally, energy storage needs to be widely expanded to harness excess renewable energy during the day for usage at night. The study estimates that storage with 12 hours or less capacity will need to expand by up to 70 times its current capacity, which would mean over 1,600 gigawatts (GW) of storage capacity by 2050.
How rapidly will solar have to grow?
Short answer? Much quicker than it’s growing today, even though the solar industry experienced record growth in 2020. Longer answer? In 2021, solar constitutes about three percent of U.S. electricity supply at about 76 GW (after 15 GW were installed in 2020). According to the study, between now and 2025, we will need to double that growth to 30 GW each year. Then, between 2025 and 2030, we will again need to double growth to 60 GW each year: a four-fold increase from the record-breaking 15 GW in 2020.
Solar deployment would again need to accelerate between 2030 and 2035 to reach 1,000 GW (40 percent of total electricity) by 2035. At this point, we could achieve the 95 percent emissions reduction from 2005 levels in the electric grid. Between 2035 and 2050, deployment could slow slightly and we would still reach 1,600 GW of solar and 100 percent decarbonization of the electric grid by 2050.
Under the “beyond” Decarb+E scenario, the U.S. could achieve total decarbonization of the U.S. energy system by 2050 if we ramp up solar deployment even further to reach 3,000 GW by 2050.
Does large-scale solar take up too much space?
Land use is a very valid concern and important consideration in expanding utility-scale solar deployment. According to the Solar Energy Industries Association (SEIA), utility-scale solar power requires anywhere from five to 10 acres per megawatt (MW) of generating capacity! The Solar Futures Study asserts that land availability will not limit solar deployment, and by 2050, solar will at most need a land area of about 0.5 percent of the contiguous U.S. surface area.
Only 10 percent of this land (i.e., 0.05 percent of the contiguous U.S. surface area) would need to come from potentially suitable disturbed lands. Expanding the use of agrivoltaics (solar panels on farms to enhance agriculture), floatovoltaics (solar panels on bodies of water), and hazardous waste sites for solar deployment will all help reduce the amount of pristine land necessary for rapid solar growth. Increasing rooftop solar will also play a substantial role in reducing the land needed for utility-scale solar!
How much will the energy transition cost?
If the first thing on your mind after hearing about the clean energy transition is: will this increase my electric bill?!, you’re certainly not alone! However, this study shows that the 95 percent decarbonization target by 2035 can be achieved without increasing electricity prices for consumers. How is this possible? First off, solar energy is cheap! We’ll explain two of the largest factors, and provide an overview of why the benefits outweigh the costs.
Consider that you’re living in Texas in the middle of summer. It’s hot outside so you – and all of your neighbors – are running the air conditioning at full blast. Because there is such a high demand for electricity, your utility has to turn on infrequently used power plants, which are expensive to operate (and have higher carbon emissions than other types of power plants).
However, in a world where we have significant availability of solar power, the time when you need air conditioning the most also probably coincides with when the sun is shining the brightest, so your utility doesn’t have to rely on high-cost back-up power plants to meet the energy demand. This is an example of demand flexibility, which the study estimates would reduce decarbonization costs by approximately 10 percent.
Solar technology improvements
While the cost of solar has decreased significantly over the past decade, the study assumes that improved solar technology will drive down costs even further. Improvements in solar panel efficiency, lifespan, and temperature coefficients will all be important in making solar energy cheaper and more accessible. Furthermore, improving and enhancing the recycling of solar panel components will also reduce the cost of solar, and make the entire lifecycle of solar products more sustainable.
As we discussed above, 95 percent of decarbonization can be accomplished without increasing electricity prices for consumers – but what about the remaining five percent? Studies show that the final stages of decarbonization come with the biggest price tag: by 2050, the cost of power systems in the electric grid will increase by about 25 percent under the Decarb+E scenario, which will cause electricity prices to increase. Overall, this means that the cumulative power system costs in the electric grid will be about $562 billion higher than under the Reference scenario. While this is obviously a lot of money, it’s important to consider the savings that will be incurred by switching to clean energy. In fact, the study estimates that the Decarb+E scenario would result in net savings of $1.7 trillion due to avoided damages from climate change and health savings from improved air quality.
What are the major obstacles to expanding solar?
If you think this all sounds too good to be true, you should understand that expanding solar significantly and transitioning to a decarbonized electric grid will require formidable work – and it won’t be easy. While the DOE absolutely believes it’s possible, we’ll first need to overcome some major obstacles:
Supply chain constraints
You might be aware that the solar industry has faced major challenges in the supply chain over the past year or so. These constraints have come from a number of sources, including the COVID-19 pandemic and forced labor concerns in Xinjiang, China (a major producer of solar panel components, from which imports to the U.S. have been banned) and have led to project delays across the country. According to the Solar Futures Study, the technological improvements and increased solar panel recycling described above will help alleviate these constraints – and increased domestic manufacturing of solar panels may play a large role as well.
While more of a benefit than an obstacle, solar energy jobs are expected to increase substantially under the Decarb+E scenario, driving major economic benefits, but also requiring significant training. Jobs in the solar industry are already projected to increase by 2035 – but the clean energy transition would provide even more employment opportunities. In fact, the study estimates that by 2035, the solar industry could employ between 500,000 and 1.5 million people in the U.S. and the clean energy transition overall could employ 3 million people.
Finally, one of the most crucial obstacles to achieving rapid solar deployment and a clean energy transition is policy. Between the infrastructure bill and the budget reconciliation bill, we could soon have significant policy advancements that would lay the framework for hitting these targets.
In addition to federal policy, the plan would likely require support from local and state jurisdictions as well, which could prove challenging in areas that are less supportive of clean energy adoption.
Is an extension of the solar tax credit coming?
One thing that’s on the mind of everyone in the solar industry is the possible extension of the investment tax credit (ITC) – which provides a tax credit equal to 26 percent of your solar installation costs. The credit is currently set to drop to 22 percent in 2023 and disappear altogether for residential solar systems in 2024.
The Solar Futures Study did not include this extension, or the adoption of any other policies targeted at distributed solar (such as rooftop) in their analysis. However, the DOE does note that policies aimed at promoting distributed solar could increase solar deployment even more than what’s outlined in the study.
In September 2021, almost 750 companies – including EnergySage! – sent a letter to Congress calling on them to extend the ITC long-term, allow the ITC to apply to standalone storage (i.e., without solar), and add direct pay provisions (meaning that people who don’t have enough tax liability could still take advantage of the incentive). The letter also urged Congress to invest in domestic manufacturing, grid resilience and upgrades, and training programs to build the solar workforce.
Be part of the clean energy transition by going solar today!
Expanding rooftop solar will be critical to the clean energy transition. In fact, the study estimates that 200 GW of rooftop solar will be deployed by 2050, representing between 10 and 20 percent of total solar deployment across that timeframe. Adding solar to your home can help your community by improving air quality and reducing your risk of climate disasters – all while saving you money! On the EnergySage Marketplace, you can compare multiple quotes from pre-vetted solar installers to help you find the right solar system at the right price.