You shouldn’t expect solar power to make a big splash. Only about 10 percent of U.S. houses are well-suited for rooftop solar, so there isn’t much point in advertising the technology to the broader public.
Not just any house can generate solar power efficiently. Most houses can be ruled out quickly for one of these reasons, or others:
- No level or south-facing roof.
- The local electric utility doesn’t permit it.
- Too much cloud cover.
- Trees or tall buildings nearby.
With so few ideal customers, there might not be much hype around solar this year or next, but the cost of a solar installation has fallen so much that people who can are installing solar systems just to save money. Even situations that don’t look so favorable in a traditional financial analysis may be a good investment for a homeowner who has the money. Consider a relatively unfavorable scenario in which a homeowner can spend $20,000 and save $80 a month on electricity. That works out to an ROI (return on investment) of 4.8 percent. A growth-oriented business might scoff at a rate of return as low as that, but it is nevertheless 10 times what you can get by putting the same money in an ordinary savings account, and there are other advantages. A solar installation doesn’t share the same risks you face when you rely on the banking system, particularly the risk of inflation.
At current prices, it is easy to imagine rooftop solar installations at a rate of 1 percent of houses per year, and that could go up to 2 or 3 percent as equipment prices fall. Even that is a pace of change slow enough that you might not notice it while driving around your neighborhood, but it adds up to a substantial role for solar electricity in the not-so-distant future.
