Solar Review: 3 Key Takeaways about the State of PV in 2023
This year, the solar energy industry experienced some game-changing innovations as well as some formidable challenges. One thing that remained consistent and dependable is the continued demand for sustainable power solutions.
The widespread adoption of solar technology has been a notable trend, driven not only by environmental considerations but increasingly by changing economics. The continuous reduction in the Levelized Cost of Electricity (LCOE – the lifetime cost of generating energy from the PV system), has heightened the global demand for solar power. This cost decline can be attributed to a combination of technological advancements and economies of scale, bringing about more realistic and feasible energy alternatives to fossil fuels. Additionally, as electricity pricing models are changing to support aging grid infrastructures, with an increasing emphasis on dynamic and time-of-use structures, solar energy continues to be economically viable in most regions.
As we delve into the state of solar energy in 2023, a more nuanced perspective emerges, highlighting both the progress made and the challenges that lie ahead in the pursuit of a sustainable future.
Solar has become the fastest growing energy generation method
Source: U.S. Energy Information Administration — EIA — Independent Statistics and Analysis
Navigating new electricity pricing strategies
Electricity pricing is undergoing a transformative shift, marked by the increasing adoption of time-of-use pricing and dynamic pricing models. Traditional flat-rate structures are giving way to more nuanced approaches that reflect the fluctuating demand throughout the day. Dynamic pricing adjusts rates based on demand, incentivizing consumers to shift usage to off-peak periods when electricity costs are lower. Time-of-use pricing similarly encourages flexibility by varying rates during different periods throughout the day.
In this dynamic pricing environment, battery storage and management emerge as a game-changer, presenting new opportunities to residential PV system owners. By storing excess energy during low-demand periods and releasing it during peak hours, batteries empower consumers to capitalize on favorable pricing structures, optimize energy consumption, and contribute to a more efficient and sustainable energy grid. This not only enhances cost-effectiveness for consumers but also supports a more resilient and adaptive electricity infrastructure.
SolarEdge Home Battery owners can use the mySolarEdge app to configure their battery preferences, including a Time-of-Use mode for fluctuating utility rates.
Energy optimization and management
Partially driven by this transformation in energy pricing, the focus on energy management and optimization solutions have intensified, utilizing data-driven algorithmic approaches and smart technologies to enhance the efficiency of solar power systems. As part of the SolarEdge Home smart energy management ecosystem, we unveiled SolarEdge ONE, a comprehensive software-based energy optimization solution designed to manage and adapt to each home’s energy needs and preferences in real-time. SolarEdge ONE uses internal data sources such as the household’s power consumption and production output, along with external data sources such as weather data and utility rates. It analyses this information to generate a personalized 24-hour energy program every day so that homeowners can maximize their energy saving by optimizing their energy production, storage and consumption.
For example, leveraging real-time data on import and export tariffs, in conjunction with PV and consumption forecasts, SolarEdge ONE can determine optimal times for charging or discharging the solar battery. This intelligent energy management solution dynamically adjusts to fluctuations in solar production and consumption patterns to maximize utility savings.
Growing trends in dual-use and community solar
In view of increasing challenges related to land availability and competing land usage, the solar energy industry witnessed an increase in dual-use applications that both optimize space and create possible new revenue streams and cost savings. Floating PV systems represent a large percentage of these dual-usage trends. By deploying solar modules on water surfaces to overcome land-scarcity, these floating solar installations also offer additional benefits such as reduced water evaporation and increased energy yield due to the cooling effect of water.
A 5MW floating PV installation in the Negev Desert, Israel
Simultaneously, the increasing adoption of Agri-PV – a practice that integrates solar panels with agricultural activities – harvesting electricity above and crops below, presents an innovative sustainable dual land-use solution that maximizes resource efficiency. By harmonizing solar energy generation with farming, Agri-PV supports the dual targets of clean energy production and increased agricultural yield. Studies show that solar panels installed over crops can protect the crops from extreme weather, such as heat or hail, and reduce water evaporation while simultaneously producing an added revenue stream for farmers.
Zucchini growing underneath a SolarEdge Agri-PV installation in Taiwan
The rise of community solar projects in the US is reshaping the idea of how renewables are deployed by enabling shared access to solar installations, fostering community engagement, and collectively reducing carbon footprints. However, location is a key factor to success as this affects the project’s cost, incentive structure, and the program offered to community subscribers. These growing solar trends not only address the pressing issue of land competition but also pave the way for a more integrated and sustainable approach to energy generation.
SolarEdge maximizes energy generation despite uneven terrain at a community solar installation in Rhode Island
Looking ahead to 2024
The solar energy landscape of this past year was shaped by growth that exemplifies the industry’s adaptability to overcome challenges. Looking to 2024, solar will continue to shine with an increased focus on enhancing energy storage capabilities and energy management optimization, and on dual-use applications. SolarEdge's commitment to technological advancements positions us as a key player in propelling this industry towards greater efficiency, resilience, and accessibility. As solar energy evolves, each of us holds the potential to play an even more significant role in the global energy transition, contributing to a cleaner and more sustainable world.
The new SolarEdge 330kW inverter solution, launched in the US in September 2023, is designed to overcome challenges often posed by shading, soiling, and uneven terrain in community solar and dual-use PV sites.
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