We speak with Buddy Starr from Greentech Renewables about trends in solar power technology and the solar industry as we begin 2024.
John Maher: Hi, I’m John Maher. I’m here today with Brian Sadler, Vice President at Solaris Renewables, a solar company in Massachusetts providing premium solar and storage technologies with exceptional customer service; and designing, installing and servicing solar systems in Massachusetts, Southern New Hampshire and Maine. Today, our topic is 2024 trends in solar power. Welcome, Brian.
Brian Sadler: Thanks, John. Good to see you.
John: You too. And our special guest today is Buddy Starr, General Manager of Greentech Renewables, New England. Welcome, Buddy.
Buddy Starr: Thanks, John. Thanks for having me.
Advancements in Solar Panel Technology
John: Sure. Yeah, so we’re looking forward here — we’re recording this in December of 2023 — and we’re looking forward to the coming year in 2024 and what that means for the solar industry. Buddy, can you discuss any breakthroughs or advancements in solar panel technology that are expected to shape the industry in the coming year?
Buddy: Sure. Yeah, I mean, I think as with most years, we get a little increase in nameplate power class. So, we’re going to see modules abundantly north of 420 watts, I think, that’s going to be pretty widespread. The technology shift from mono perk, which is going obsolete on us, and moving towards the end type technology, which sometimes people refer to as the topcon of technology, which really is just going to drive more efficiency for longer periods of time and lower degradation, so we’re able to produce more power for longer.
Brian: Nice. What about the electronics, right? So, we’re seeing the inverter companies diversify a little bit and starting to look towards some, obviously, storage and battery solutions. They’re trying to improve the chemistry and the batteries themselves and then the functionality of them and working with the electronics and your solar system to have a whole home energy solution.
Buddy: Yeah, we’re seeing a lot of that. There’s a lot of manufacturers trying to tie it all together into a smart panel or into a nice user-friendly interface on your phone. Everything from storage and backup, EV charging, load control. It’s all wrapped together on making a smarter home for our customers.
Solar Energy Storage Solutions
John: Can you talk a little bit more about the storage solutions and how you see that evolving in 2024? What impact that will have on the reliability and scalability of solar power systems?
Buddy: I mean, we’re still at the infancy of energy storage. I think we joke around when we go to the trade shows that there’s more battery companies than there are inverter manufacturers right now. So there’s a lot of interest in the space, there’s a lot of folks trying to figure it out. I mean, I think the chemistry is still not solved on that. It’s still evolving and getting safer, and better, and cheaper, and we’re getting towards scale there. We’re also competing, so to speak, or we’re developing in parallel with a lot of the electrical vehicle improvements. So we’re producing electric vehicles with longer ranges, and faster charging times, and longer life cycles. So that’s all innovating right now in the stationary storage space as well. So yeah, it’s exciting, but it’s certainly not set in stone yet. There’s a lot of different manufacturers, a lot of different options, which is exciting and also can be frustrating.
Brian: Yeah. More to keep coming but, I mean, there is a ton of storage jumping into the market, right? Because it became a hot product and then you saw, worldwide, a lot of manufacturers popping up all over the place that are now creating batteries. But I think that a lot of the tried-and-true manufacturers, the big inverter and/or EV manufacturers have really a solid, reliable product and they’ll continue to evolve them and add functionality, which a lot of them…it comes in a box and then it’s just like a solar panel. Solar panels themselves don’t do anything, neither does the battery. You need the controls, electronics software platforms, to really give it the functionality and manipulate how it works and how it’s going to benefit the homeowner or the business. And we’ve seen that that’s able to evolve in itself, which gives the same box that you bought a year, two, five years ago, more functionality than when you first had it.
AI in Solar Power Systems
John: Everybody’s talking about AI now, artificial intelligence, whether it’s from ChatGPT and Google Bard to AI systems being integrated in software programs. Do you see AI coming into play in the solar industry and playing a role in the optimization and management of solar power systems?
Buddy: Yeah, I can’t think that that would not come in, right? AI is great at organizing data, sorting data, processing data and there’s a ton of it in our industry. So I can’t predict to tell you how and when that gets deployed, but I think the fact that it will is a certainty.
Brian: I think we’ve seen it more on the software side, right? Our proposal platform for instance, has this optional…so we can opt to have all our designs done in AI. And I know, probably, plan sets and other human design functionality could be replaced with AI coming up, but we’ve started to see just little bits and pieces of it. But to Buddy’s point, that’s probably going to be integrated more into some of these systems and the monitoring or control platforms to make better decisions. For instance, California has time of use utility rates and then instead of the user having to maybe go in and manipulate, and when they want to charge, discharge their battery, their EV, that some of the AI might be able to take care of some of that. But it’s speculative, I’d say, on our part right now. We have seen it on some of the software platforms that it’s been used. I would assume also on a larger level, maybe aggregating a lot of systems on a commercial, industrial level, probably you’ll see some more of that, to moving power.
Buddy: Yeah, yeah. Monitoring and maintenance.
Brian: Exactly, yeah. We see drones, right? Not exactly AI, but there’s a lot of big solar fields using drones and other technologies. And I’m assuming AI is going to be integrated into that for their operating maintenance. And watching over what it would take several people to do.
Solar Tracking Systems and Other Technology Innovations
John: Can you highlight, Buddy, any developments in solar tracking systems, maybe some other innovations in solar technology that you feel like are going to become more prevalent in 2024?
Buddy: Yeah, I mean, trackers were popular when solar panels were really expensive. You wanted to maximize the amount your solar panels could be hitting the sun. I think today, at least from what I see, they’re much less popular than just a fixed tilt ground mount, which are easier to install, easier to maintain, and a lower cost. So I haven’t seen any huge developments in the tracking side. But it’s solar, so I think if there is some value to that, it’ll certainly find its way into our space.
Brian: Yeah. Our industry is a lot like the New England weather. You don’t have a solution, just wait five minutes. And things evolve and change rapidly, which is exciting, and it proves that the industry has a lot of interest investments. And it’s exciting to see these new products and solutions come to market. We do trackers and fixed ground mounts, and it’s not as prevalent because obviously, it’s always going to be more cost-effective if the infrastructure’s already built on a home or a building. So it’s always going to be more cost-effective if you’re not building the infrastructure in order to hold solar. But there are certainly applications for folks that have plenty of open space, and especially with high bills or operating farms and other things like that, they can take advantage of it. But again, you’re building the infrastructure first in order to hold solar as opposed to a roof mounted system where the infrastructure’s in place.
John: Is part of that too, Brian, that solar panel technology has become so great now that they’re able to produce electricity even when the sun is at a pretty sharp angle toward the panels as opposed to previously, when the sun really had to be shining directly on those panels?
Brian: Absolutely. The panels and the electronics have come a long ways where that they can be more effective in low light and off light situations. I show folks that my solar system’s making power before I can see the sun. So the sun’s down behind the trees, but even though it’s little bits, all those little bits add up. And I’m going to go back to what we were talking about earlier about the cell technology has – it’s essentially the same thing we put into space in the 1950’s — but has come a long ways in terms of the productivity, the efficiency, and the degradation. And now, the application to a residential or commercial building where it needs to be resilient to weather and environmental impacts. But yeah, we’ve absolutely seen it come a long ways in terms of being able to collect more sun where you don’t need to necessarily put it on a track and square it up to the sun throughout the day and the year.
Solar Policies and Regulations in 2024
John: Buddy, in terms of policies and regulations, what changes do you anticipate will come into play in 2024 that will support the growth of solar energy adoption in various regions in the coming year?
Buddy: Sure. I think, nationally, these IRA guidelines should be clarified, which will bring some more investment into this space. That’ll drive a lot more of the third-party ownership model. I think we’re going to starting to see a lot of shift to that, so I expect 2024 to be defined around domestic content and maybe third-party ownership as a vehicle in many ways to capture a lot of that.
Brian: And yeah, the third-party ownership is what we hear a lot of leasing that’s kind of a… But third-party ownership is really what that is, meaning that the homeowner or business does not own the system. It’s a bank or investors or group of investors that are able to take a residential system and classify it financially as a commercial system, which then brings in a whole other category of these qualifications from the Inflation Reduction Act that Buddy was talking about with domestic content, prevailing wage, depreciation. And that can really accelerate the savings by passing on to the homeowner a lower monthly payment. So we’ve seen a shift. Even this year, Buddy, we’re seeing a shift in most markets that there is an uptick of that third-party ownership model. And it is, I’d say, really enticing for that upfront payment. And it’s just a matter of looking. Again, if we’re looking at a long-term play, the year one savings is going to be great, the month one, year one, and even the first few years.
But generally, those have escalators on them. If you’re looking at the total cost of ownership, I think even with high finance rates at the time, you’re still going to pay less money for less time by owning the system and trying to work with your installer to find a solution that makes sense for you.
Buddy: Yeah, absolutely. You can’t really put a price on ownership. There’s definitely some value to that. You get to claim your own tax credit and you get to own your system rather than just trading for essentially a different utility company.
Brian: Right. And you’re getting all the other local incentives, what local incentives happen to be available in your area. In Massachusetts for instance, there are 41 municipal light plants, which are individual town utilities that have, potentially, their own rebate, their own solar program, and other incentives. They actually don’t allow third-party ownership for the most part and they require that the homeowner owns the system. And so, there’s additional incentives to do so in those regards as well.
Solar Financing in 2024
John: Related to that, are there any changes in terms of solar financing models that are likely to gain prominence in 2024 and which might make solar power more accessible to the consumers?
Buddy: Yeah. We pretty much just talked about it. It’s the evolution in some of the third-party ownership stuff to harvest more of that, which are credits in the IRA. They’re somewhat controversial that a third-party owner can claim those extra credits on your house, but the homeowner can’t. So that’s again, some language that has to be sorted out in the ITC and there’s a handful of interpretations. But one such interpretation is that to capture those credits, we’ll have to do a third-party ownership model, whether it’s a lease or a PPA of some sort.
John: And I know Brian, that you work with some companies that specialize in solar financing. Can you talk a little bit about that and the role that plays in terms of…is that a better option than, say, going to a standard bank or something like that for financing your solar panels?
Brian: Yeah. If you’d go into a standard bank, you’re essentially, what’s to us as an installer, a cash customer. You’re figuring out your own financing, be it a HELOC or some type of home equity product savings, cashing out, or different investments. Generally speaking, you can’t go to a bank and say, “I want to take a loan on a solar system.” They don’t understand that banks are very traditional, I would say, in their financing, and conservative, and they haven’t fully wrapped their head around what solar means. Other companies that have realized that it’s probably the safest investment that they can make, given that you are taking a bill and lowering it. And especially in our region, credit scores are high and default values are essentially zero. So, it is one of the safest bets a bank can make. But in a historical banking institution’s view, there’s not enough data, right? 25 years’ worth of data is not enough for them to say, “We’re going to have our own solar loan.”
There are some credit unions that really piggybacked off an older program called the Mass Solar Loan and learn like, “Hey, this makes a ton of sense,” and they’ve created their own solar loans. But then there’s a whole industry, nationally, that is solar specific financing. That also includes different treatments for the incentives. And for peripheral items, they allow you to include batteries, some roofing work, site preparations, electrical work. So there’s a lot of opportunity to make it a really great customer experience and have them paying a lower than they are today, which is the goal.
So there’s certainly a transparent portal for the customer. All online process, very simple and easy, as opposed to a traditional banking model. I would say back to Buddy’s point on the third-party ownership, it would be great if there’s some way to pass some of that incentive that they’re working on, be it the domestic content, prevailing wage depreciation, back to the homeowner.
I think another piece with the Inflation Reduction Act or IRA as everyone refers to it, is that they did a direct pay model for the federal tax credit, so you can directly pay back as opposed to taking it as a credit on your taxes. So that opens this up to educational, religious, and other nonprofits that now can realize that tax credit where they could not before, their only option was third-party ownership or to have a group come in and buy it for them and take the tax credit on their behalf.
It’s exciting. I would say that the IRA has created some more economic and financial opportunity. But the industry’s still coalescing on how they wrap their heads around it and waiting for the government to really finalize the real regulations and rules around it. So, you can sell the tax credit and then there’s a lot of stuff going on now, there’s a whole market for that at this point, which is a similar look at that third-party ownership. So, I know one thing is our industry is tremendously innovative.
And as those rules get clarified, there’ll be new financial products that pop up out of that, and there’ll be other ways and new ways for homeowners and businesses to be able to save and leverage solar and the peripheral energy sources that they can use for their home and businesses.
Challenges and Obstacles in the Solar Industry in 2024
John: Buddy, do you see any challenges or obstacles in the solar industry in 2024 that the industry might need to overcome, and do you see ways around those obstacles?
Buddy: There are always obstacles in our industry and every year it’s a little different. We had the big supply chain stuff over the last couple of years and now it’s interest rates and availability of finance vehicles. Next year, I think it’s going to be some of that. I mean, there might be some local policy challenges related to net metering coming up for us over the next couple of years, so we’re going to be diligent on that. Obviously, California’s going through that now. But yeah, I think, it’s really hard to foresee what all the problems will be, but as Brian said, this industry is resilient and we’re really good at solving problems to overcome them.
Brian: Absolutely. I hope there’s no more challenges and that things are smooth sailing. It’s funny how we always are… This time of year, we’re planning for next year. We’re usually planning on existing conditions and what the landscape dictates now. And then each quarter or half a year, there might be something. Again, with here in the Northeast, there’s a lot of regulation, and a big thing for us right now is fire code. It was a big fire code change in regards to storage, and just as soon as we navigated that and thought we had that figured out, here comes new solar fire code and setbacks and things for the panels on a roof. So we’re still navigating that as well. So this was not the plan in 2023, so I’m sure 2024 will present other challenges and other victories as well as other regulations get clarified.
John: All right. Well, that’s really great information guys. And Buddy Starr, thanks for joining us today. And can you tell us a little bit about Greentech Renewables?
Buddy: Sure. Yeah. We’re a distribution and supply partner for a lot of local solar companies. We provide logistics, warehouse support, as well as financial and design services.
John: All right. Well, thanks for speaking with me today. And Brian Sadler, as always, thanks again for joining us as well.
Brian: Thanks, John. And thank you, Buddy for joining us.
Buddy: Sounds good. Thank you.
John: And for more information, you can visit the website at solarisrenewables.com or call 781-270-6555.