Can solar lead the way in spurring crucial economic development post-COVID-19? Industry experts in the financing sector believe so — hear their thoughts below.
In July, our portfolio company Aurora Solar hosted its first ever virtual summit dedicated to navigating the unique challenges and possible opportunities amid COVID-19. Energize Principal Tyler Lancaster moderated and participated in the session titled Show Me the Money: Solar Project Financing in a Downturn, featuring experts from Mosaic, Sustainable Capital Finance and kWh Analytics. In this post, we’ll cover the key takeaways shared during our discussion. If you’d like to listen to the full session, you can watch it for free on-demand here.
Solar as a renewable energy source is now mainstream, yet it’s still just the beginning for the industry. As of 2020, solar serves more than 2 million households in the U.S., and, alongside wind, accounts for more than 75 percent of new capacity additions to the grid. However, rooftop solar is currently installed on less than 2 percent of U.S. homes. The outlook for growth in the sector has never been more promising now that the levelized cost of solar is less than the ongoing cost of operating coal plants. In other words, it’s currently cheaper to build more solar than operate many of our existing fossil fuel infrastructure.
Despite the COVID-19 pandemic and subsequent economic downturn, we believe solar will be an influential driver of economic recovery in a post-COVID environment. Why?
1) Resiliency: Distributed solar provides an economical and resilient alternative to grid electricity, especially when paired with battery storage. With work and school going remote, home power bills are rising — and solar can provide immediate cost savings with no-money down financing. Weather disasters are also on the rise, reducing the reliability of grid electricity in many locations across the U.S. Solar paired with storage ensures essential appliances and equipment stay on during outages.
2) Air Quality: Solar reduces localized air pollution and accelerates decarbonization of the power sector. As folks spend more time walking in their neighborhoods, municipalities and cities, the improved air quality during quarantine is instantly noticeable. Shifting away from fossil fuel power and combustion engine vehicles can dramatically improve local air quality, fast.
3) Jobs: Solar creates high-quality jobs in local communities. Clean energy accounts for more than 3 million jobs in the U.S. alone, outnumbering oil and gas 3 to 1. In fact, solar technician has been one of the fastest growing careers over the past decade.
Solar financing, in particular, has a unique role to play in the near-term recovery and future growth of the industry and economy at large. Panelists the Summit’s solar financing session agreed and shared the following themes during our discussion.
Unlike the 2008 financial crisis when many investors fled from clean energy funding, the industry has remained resilient during the current pandemic. In fact, it has attracted additional investor capital as a clear growth opportunity coupled with compelling economic fundamentals. Solar’s resilience during COVID-19 is a harbinger of the decade to come — a mature industry with a vast pool of potential new customers, increasing access to mainstream financial tools, and a mission to create access to solar for all.