I’ve added electrification predictions for 2024 to my customary set of solar and storage predictions. Electrification incentives in the Inflation Reduction Act (IRA) are already starting to drive demand for heat pumps and electrical upgrades, just as tax credits accelerated the solar and EV markets in the past. My better half pointed out that 2024 predictions are much tougher than 2023 recaps. Nevertheless, here I go sticking my neck out again with these 10 predictions for 2024.
1. EVs will be equipped with integrated 240-volt generators
More EV manufacturers will follow Ford’s and Tesla’s lead with integrated 240-volt generators in their vehicles. These generators will enable owners to use those huge batteries on wheels to power their home, both for ordinary daily use as well as during increasingly frequent blackouts. Clever drivers will learn to charge their vehicles inexpensively during the day, and then use their vehicle’s batteries to power their homes during peak electric times during the evening.
2. Heat pump sales will surge by 25%
Heat pump HVAC and water heater system sales will surge by 25% in 2024, limited only by equipment supplies and contractor resources. Even though IRA rebates for these systems are still not available due to DOE and state energy office delays, customers are buying because of the market awareness created by the IRA. Customers are taking advantage of currently available tax credits and local incentives for this equipment — which in some cases cover more than half the total installation cost.
3. Fewer than half of new clean energy manufacturing plants will be completed
The IRA provides strong incentives for EVs, solar, storage and heat pump manufacturing in the United States. However, rules for applying these incentives to both manufacturing facilities and projects are complicated. Although there have been over 60 manufacturing plants announced, fewer than half will actually go into full-scale production once the incentive and supply chain details are understood.
4. Utilities in other states will follow California’s lead to end net metering
Credit: Titan Solar Power
The end of net metering in California will energize utilities in other states to limit the growth of rooftop solar and storage. The dirty secret is that utilities are permitted to use ratepayer funds to influence state politicians to eliminate competition from rooftop solar – and basically enforce their monopoly. Laws to restrict utility lobbying are uniquely difficult to pass since utilities spend tens of millions of dollars to lobby against these same laws.
5. Residential solar revenues in California will plunge by 50%
Residential rooftop solar revenues in California will plunge by 50% in 2024 compared to 2023. Even though California electric rates continue to increase at over 10% per year, the state is unlikely to recover its solar leadership position until net-metering policies are restored. Customer rage from skyrocketing electric bills and the end of NEM will backfire on politicians who accepted millions in contributions from utility interests over the past six years. Relying on the utility gravy train to get re-elected will no longer work for politicians once voters link their electric bills with the lobbying money their state representatives raked in.
6. A national-scale solar installation company will file for bankruptcy
Continued financial losses at national-scale solar installation and finance companies will result in at least one high-profile bankruptcy. The finance business model for large-scale residential solar companies is very sensitive to interest rates. Solar finance companies borrow money for PPAs and leases for relatively short terms to fund their growth and then get paid back over the much longer term of the PPA or lease. When interest rates spiked, they were not able to maintain their profits due to lower revenue and higher borrowing costs. Interest rates will decline significantly in 2025 at which time the solar finance market will bounce back, especially since average electric rates will be higher and equipment costs will be lower.
7. Tesla will claw its way into the U.S. inverter business
The inverter duopoly of SolarEdge and Enphase will turn into a tri-opoly (new word, not the board game) with the entrance of Tesla’s hybrid string inverter. Tesla will muscle into the inverter business with the combination of its brand name advantage and lower system costs – even though the performance of their systems will be lower without module-level electronics.
8. VPPs and V2G will not gain traction
Utility-sponsored tests of virtual power plants (VPPs) and vehicle-to-grid (V2G) will continue but will not gain traction without large customer incentives. The underlying friction of these business models is that utilities are unwilling to compensate customers for the full value of the battery systems – for the simple reason that utilities generate higher profits if these battery assets are owned by the utility itself rather than the customers. The paltry amount of money that utilities are willing to pay for customer-sited resources is insufficient to cover customer costs of their batteries, not to mention installer, manufacturer and aggregator costs to support these systems.
9. The residential battery system business will consolidate
The crowded residential battery system business will consolidate down to four national-scale players. Batteries by themselves are relatively inexpensive. On the other hand, releasing a complete and fully UL-approved battery and software system is expensive. But that’s just the beginning — building out a national sales and service organization costs a fortune. New battery system entrants — without the investment and army of people that it takes to support customers — will not succeed.
10. It’s game-over for fossil fuels
COP28 showed the world that it is “game over” for fossil fuels. Economics is the simple reason for this transition, although it will take another generation for the transition to be completed. Energy from solar and wind is already much less expensive than fossil fuels. These renewable energy sources are being deployed at an accelerating rate, while at the same time technologies that clean up fossil fuel emissions — such as carbon sequestration and storage, and direct air capture — struggle to pencil out economically. Despite the billions of dollars that fossil fuel companies spend to extend their businesses and continue to pollute, they are destined to become extinct just as their dinosaur ancestors.
Editor’s Note: The opinions expressed within this article are solely the author’s and do not reflect the opinions of Solar Power World or its affiliates.
Right on! Having worked as a commercial solar energy developer and financial planning consultant for fifteen years, I saw the writing on the wall when CA passed NEM 3.0 and it’s already happening from the bottom up with smaller solar installers going out of business first and adoption rates dropping like a stone. Other states are following suit. This is big IOU’s flexing their monopolistic muscle with PUC’s otherwise known as legislative advocacy groups for the utility industry.
Fortunately waste to energy is the new solar and finally has the same tax incentives due to the IRA. That’s why I shifted to that business.
Pay attention to Xerion. They could put Tesla out of the battery business and signal huge leaps in battery efficiency, and longevity while reducing cost and size. It’s a potential sea change.
Keep up the good work!