Advancements in solar panel and racking systems are expected to be minimal in the coming years, spanning the next two decades. The progress in racking systems is closely tied to commodity costs such as steel and aluminum, with current panels utilizing the same raw materials for the past four decades. The global solar economy has transitioned from Spain to Germany and presently to the United States, where advancements have primarily occurred in mining raw materials and enhancing panel manufacturing processes, resulting in improved quality control, larger production capabilities, and more cost-effective pricing.
The efficiency rating of combined raw materials, including boron, titanium dioxide, and silicon dioxide, has experienced only marginal improvement from approximately 20% to 22% over the last two decades. The efficiency-to-cost per watt ratio is not anticipated to see significant growth at present.
A notable breakthrough in solar panel technology is the capability for panels to operate under partial shade, particularly beneficial for residential or downtown applications. Solar shingles and PV thin film are projected as the next advancements in solar cells, expected to reach a reasonable cost parity in a decade. However, these options are not foreseen to enhance project economics, as they will generate energy of consistent quality for over 35 years with a 0.5% annual degradation factor.
The focal point for the future of solar lies in the advancements in solar inverter technology. Inverters, responsible for managing the DC power generated by solar panels, are anticipated to undergo significant developments in the next 5-10 years. The software systems controlling power electronics have advanced considerably since the widespread adoption of solar in the United States. Today’s inverters are designed for software updates, ensuring they stay current with market evolution throughout their 15 to 17-year lifespan. Inverter pricing is expected to decrease in the next decade, although inflation may offset this reduction, resulting in similar actual dollar costs.
The primary innovations in the inverter market are expected to revolve around regulating fluctuations in high-frequency demand response to align with utility billing metrics. Notably, many inverters are now equipped for battery upgrades, requiring only a software update.
The most significant and tangible technological shift in the solar market over the next 6 to 10 years is expected to be in batteries. Connecting batteries to solar systems allows for storing solar-generated power for use during periods of low sunlight, such as at night or in cloudy conditions. The integration of solar and battery technologies has become more accessible, with new battery types emerging annually for various facilities and applications. Lithium iron is highlighted as a notable advancement in battery technology. As battery technology continues to improve, solar investments are expected to become even more attractive.
In summary, solar panels and racking represent enduring and sound long-term investments, having entered a phase of “perfectly competitive market” pricing. Companies are advised to plan for upgrades in inverter and software technology while preparing for advancements in battery technology, with the option to incorporate batteries at a later date if applicable.
