Disruption by Legislation
Updated: Oct 30, 2020
Residential solar energy is an interesting business. It is an industry very heavily influenced by legislation – both for and against – however, it continues to grow in spite of many hurdles.
Here are some examples of various impacts of legislation around the world:
Solar installs in the United Kingdom have plummeted in the last few years due to the reduction and subsequent elimination of feed-in tariffs (a policy mechanism originally put in place to accelerate investment in renewable energy technologies).
The recent introduction of anti-dumping tariffs on the world by the United States has pushed solar companies to load up on panel inventory and work to get the needed pricing in the marketplace. This has led to a sales burst ahead of the tariffs, followed by a slow down once they were in place.
In Canada, the largest province (Ontario) had their solar programs slashed following the recent election of the Ontario Progressive Conservative Party.
Spain’s decision to scrap its “sun tax”, which had stunted residential solar adoption for years, will create new opportunities moving forward.
California passed legislation mandating the installation of solar products in new residential construction.
The above are examples of real-world moves legislated for impact. Several are meant to drive growth in residential solar energy, some are intended to allow governments to end unaffordable programs, and one strives to help domestic manufacturers compete with the rest of the world.
Concurrent with the above legislative disruptions, many governments have implemented legislation to increase traditional power consumption. Natural gas looks to be a big winner in this push. It gives the appearance that the most prevalent legislative mindset is to encourage the status quo.
Despite all of this, distributed residential solar energy continues to thrive. In the US, deployments still look strong and several of the public companies in the industry have posted strong results. As well, in many countries, deployments are in fact growing. One of the greatest strengths of the industry is that there are so many small installers. These installers find nimble ways to grow no matter what is thrown at them. And in doing so, the disruption caused by legislation is further disrupted by the business people who simply refuse to lose.
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