2020 will be remembered as the year of shattered records, both good and bad.
Since reporting the first confirmed cases of the coronavirus in March, the U.S. has remained at the top of the charts for its COVID-19 infection rates. At the same time, our country has experienced economic ups and downs, with high unemployment offset by a steadily climbing stock market and unprecedented growth in certain sectors, including renewable energy.
A COVID-19 vaccine is now on the horizon, but American consumers remain anxious. Their quest for certainty and control sustained our nation’s solar industry in 2020. Now, this pervasive mindset — combined with current pro-solar policies and burgeoning technologies — are positioning it for even greater success in 2021.
In Arkansas, the solar industry entered 2020 following months of strong sales. In 2019, the solar federal Investment Tax Credit (ITC) dropped from 30 to 26 percent and the General Assembly enabled third-party financing for solar systems with the Solar Access Act. These changes spurred renewable energy projects statewide. Washington County flipped the switch on the state’s largest county-owned and rooftop solar array for $10.2 million in projected taxpayer savings. And one of Arkansas’ largest private companies, Lexicon Fabricators and Constructors, moved forward with plans to install nearly 11,000 panels to help offset its electrical costs.
Then COVID-19 hit. As an industry, we were uncertain how it would affect field operations and, potentially, the long-term penetration rate of solar in the state. Like many other small businesses, Seal Solar allocated funds to help protect our team members and customers. Our workforce largely shifted to remote work, with ramped up advertising and marketing to reassure customers that work was continuing safely and successfully. And we forged ahead.
As the pandemic drug on through the spring and summer, Arkansans faced rising electric bills due to greater time spent at home. Faced with increasing costs and, in certain cases, declining or unreliable incomes, many consumers decided to take the plunge and invest in solar panels and storage options. With the looming drop in the federal ITC to 22 percent, sales further soared.
Fortunately, Congress approved an additional COVID-19 relief package in December, which included a two-year extension of the federal ITC. The rate will now remain at 26% in 2021 and 2022 before stepping down to 22% in 2023. In 2024, the residential credit will end completely and commercial projects will drop to 10%. This welcome change, along with the upcoming legislative session, is expected to encourage additional investments and interest in solar among Arkansans in all corners of the state.
Another bright spot for the industry in 2021: electric vehicles (EV) and EV chargers. Over the past several years, Tesla has gained positive press from innovative projects like SpaceX, which has created greater consumer confidence in its products. At Seal Solar, we’ve harnessed these technologies as one of the state’s first certified Tesla Powerwall vendors and Tesla Solar Roof installers. In 2021, we expect to see a continued uptick in sales from Arkansans who want a steady source of power — even during outages — without relying on the grid.
The coronavirus pandemic has thrown every sector of our state’s economy for a loop, including renewable energy. Despite these challenges, the solar industry is well-positioned to power Arkansas forward in 2021 and beyond.
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