Two New Trends Redefine Residential Solar's Potential

Solar power continues its impressively steady growth, but two recent trends have redefined and energized the potential of residential solar power in America. Those discoveries reveal that the impressive growth is just the beginning.

The existing growth is already consistent and multi-faceted. The solar industry, for example, employed 142,698 Americans in 2013, according to the Solar Foundation. That's a 20 percent increase since 2012, far outpacing the national employment growth rate of almost 2 percent during the same period.

In addition, solar prices continue to drop. For the third year in a row, the installed price of solar photovoltaic (PV) power systems in the United States fell substantially in 2012 and the first half of 2013, according to the Lawrence Berkeley National Laboratory. Prices for PV systems in 2012 fell by a range of roughly $0.30-$0.90 per Watt (W), or 6 to 14 percent, from the prior year, depending on the size of the system.

Symbolic progress has been impressive as well -- with solar panels being installed on the roof of The White House to underscore President Obama's commitment to have 20 percent of the federal government's energy usage come from renewable power by 2020.

What's even more remarkable, however, and speaks to the potential for far greater growth are two discoveries than are literally changing the landscape for residential solar. The first is the revelation that, with dropping prices, solar growth has been driven by middle-class homeowners looking for savings in energy costs. That's a huge development, because it means that the economics of solar are driving the market rather than a predisposition to clean energy.

The Center for American Progress analyzed the three states with the most residential solar systems -- Arizona, California, and New Jersey -- and found that installations are overwhelmingly occurring in middle-class neighborhoods that have median incomes ranging from $40,000 to $90,000. According to the report, "the areas that experienced the most growth from 2011 to 2012 had median incomes ranging from $40,000 to $50,000 in both Arizona and California and $30,000 to $40,000 in New Jersey."

The second trend emerged from a solar campaign conducted in Connecticut by the non-profit SmartPower, which I lead, and Connecticut's Clean Energy Finance and Investment Authority (CEFIA). A recent report on the campaign, titled "Let's Solarize," revealed a proven model for dramatically reducing the cost barrier that has stood in the way of wide-scale adoption of residential solar power in the United States.

In each of four towns -- after just 20 weeks -- the rate of adoption for residential solar installations was between 24 and 64 times greater than the previous seven years. The average customer saved about $7,500 on their system, compared to current market averages. Most significantly, about 20 percent of those choosing solar under this model had never previously thought about acquiring solar power.

With these two discoveries, we now have economics that attract homeowners who have no bias toward residential solar, and a community-based marketing approach that similarly attracts those homeowners.

With these two major strides and the steady growth of solar energy, residential solar power is reaching a tipping point: prices are steadily declining; incentives for savings are growing; people who would not have considered it before are attracted by the economics; marketing techniques that mobilize entire communities are being proven to dramatic effect, and even our nation's best-known home is on board. The future for residential solar power is very bright indeed.

Brian Keane is the president of SmartPower, a non-profit marketing organization funded by private foundations to help build the clean energy marketplace by helping the American public become smarter about their energy use.