Challenges Faced by the Solar Energy Industry

With infinite availability and promise, solar energy is one of the most viable alternative energy sources. Despite the good prognosis for the solar sector, it will encounter certain hurdles in the near future.

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In the last decade, the solar energy business has exploded in popularity. Residential solar capacity added in the United States was 667 MW in 2010.  According to the Solar Energy Industries Association, that number will have risen to around 20,000 by 2021. This represents an almost 3,000 percent increase. Solar employment creation has exploded as well. According to the National Solar Jobs Census, the solar business in the United States now employs over 230,000 people, up from around 93,000 in 2010. However, despite its rapid expansion, the solar sector may not be able to completely replace fossil fuels anytime soon. There are still several obstacles preventing solar energy from reaching its full potential.

Some of the challenges are:

Grid infrastructure and utility companies

The power grid has not changed much over the past years. As Americans strive to become more environmentally conscious, the grid will need to be upgraded to accommodate the flow of renewable energy. President Joe Biden's energy plan includes a substantial power system revamp as the United States moves toward clean energy. This task is nearly impossible to complete. On the other hand, the utility companies are feeling the strain of a renewable energy revolution. Electricity isn't kept in a battery. It is generated and then sent to the grid, where it flows through power lines to fulfill the nation's supply and demand. If demand is higher than planned, a house's power may flicker or go off entirely. If demand is smaller than expected, however, energy is wasted. To avoid this, the correct balance between energy generation and consumption must be maintained.

Cost and efficiency for building superior products

Despite the fact that the cost of solar power has fallen over time, it is still a costly investment—a domestic solar system costs between $15,000 and $25,000 on average. For many homeowners who want to become green, the high expense might be a deterrent. Another area that the solar industry still has to improve is efficiency. Most well-known brands of household solar panels currently have an efficiency of 15 to 21 percent. In other words, solar systems do not catch the bulk of the energy from the sun's rays. This is mainly due to the fact that most solar panels are fixed and unable to move to meet the sun's direct rays. Engineers, on the other hand, are attempting to improve the efficiency of solar panels.

The popularity tipping point and supply chain logistics

Manufacturers scrambled to produce the panels and supplies needed to generate sustainable electricity as solar energy installations grew around the world. Despite the industry's historic expansion, the vast number of companies that entered the market resulted in an oversupply of solar panels. Some of these businesses have gone out of business because the supply was more than the need. Despite this, the growing quantity of solar panels on the market has lowered the cost of installing a solar system for consumers. Regrettably, the occurrences have cost investors millions of dollars. Without continuous financial backing, the excess could result in a lack of new solar technology in the future, thus stifling the resource's long-term adoption.

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