Why solar will win
Illustrations by Andy Smith | Animations by Jessica Rubenstein

Although only a handful of U.S. production builders offer solar energy systems, the residential solar market has quietly but steadily boomed over the past five years. Technology has improved exponentially while the cost of installation has substantially decreased, helped by a federal tax credit that’s been extended until 2019. By many accounts, this could be the year home builders start paying attention.

There’s good reason to get on the bandwagon, says the Solar Energy Industries Association (SEIA), which predicts an unprecedented boom in photovoltaic installations and concentrated solar power in 2016, largely because of the tax credit extension passed by Congress in December 2015. SEIA sees total solar capacity nearly tripling by 2020 to reach 100 gigawatts—enough to power 20 million homes and representing 3.5% of U.S. electricity generation. Had the credit expired at the end of 2016 as planned, total installed solar capacity would have declined by 64% in 2017, SEIA projected.

The tax credit is worth 30% of a solar array’s price until 2019, when it will begin to drop until it remains at 10% from 2022 on. Congress’ extension will drive $38 billion of investment in solar through 2021, pushing down costs and making solar one of the cheapest forms of electricity in many states, predicts Bloomberg New Energy Finance.

The renewed tax credit has given builders who have been reluctant to offer solar products another chance to embrace them, but first they must determine whether renewable energy makes sense in their market. Consumer demand for solar runs hot in some parts of the country, such as California, Denver, Phoenix, and Washington, D.C., but is still weak in many other areas. Codes are pushing the envelope in states like California, where all new residential buildings must be zero net energy by 2020, which means that they will need renewable energy systems in order to generate as much power as they consume.