When new transmission lines are built, it will mean that major solar power plants can get electricity to the places where it’s needed most. Current growth in solar panel installations is strong in percentage terms, but a 76% bump isn’t all that great after you realize that total installed capacity in the U.S. is only 3,313 MW. If all these panels operated at full capacity year round (realistically capacity factors are usually under 25%), solar power would currently only meet 20% of the annual electricity demand of New York.
The U.S. solar industry is still at its infant stages and has a lot of room for growth. As an investor, I would keep my eye out for infrastructure investments in new high voltage lines on the U.S. power grid between major production and demand centers. Once the infrastructure is there, a boom in solar power production in the southwest will likely follow. Until then, the industry will continue to be dragged down by high investment costs for smaller scale projects and rely on a belief in investment in green energy rather than pure profit seeking.
Looking to dig deeper into the solar industry? You’re not alone. Nine out of ten Americans now think it's important for the U.S. to develop and use solar power, while state and local governments are increasingly adopting pro-solar policies. When you also consider the decreasing panel costs and more efficient technologies and you may agree it's time for investors to seriously consider this space.
The following infographic produced by Kapitall highlights the current state and potential of the industry. Click to expand.
- Nick Sousa, Kapitall