Solar energy is cheaper than ever, and its use is growing fast. A U.S. Department of Energy (DOE) report recently found that nearly half of America’s solar generating capacity was installed in 2021. This is partly because prices have fallen so rapidly. Solar installation costs have dropped by more than 75 percent since 2010, and it’s now often cheaper to build and operate a solar plant than buy fuel for an existing natural gas plant. The DOE’s analysis was also performed before the Inflation Reduction Act passed, which contains several incentives that could supercharge solar energy’s advantages even further.
While solar energy keeps growing, its use in residential and commercial buildings is surprisingly small for the time being. Only 3.7 percent of U.S. single-family homes generated electricity from small-scale solar in 2020, according to the Energy Information Administration. A similar report found that in 2018, the share of commercial buildings with small-scale solar was even tinier at 1.6 percent. This aligns with something I recently reported, where Archipelago, a commercial property risk platform, found in a small analysis of nearly 300 New York City buildings that none of them had solar installations.
These numbers are somewhat surprising, given that solar rooftop installations aren’t a new technology. Other reports show a higher share of commercial solar installations. CBRE says that as of mid-2022, the U.S. had about 130 gigawatts of total solar energy capacity, roughly 10 percent of which could be attributed to commercial and industrial properties. The rate of solar adoption in buildings is proliferating, though. Residential solar installation increased by 34 percent from 2020 to 2021. Growth in commercial and industrial real estate has been slower recently because of supply chain disruptions, but CBRE says it still has grown by an average of seven percent annually in the past decade.
Many expect the use of solar in the built world to continue rising in the coming years. And increasingly, some creative solar applications exist in buildings and other places. Most people think of rooftop panels in terms of solar, but there are also emerging uses like powering small consumer electronics. “Wearable solar” could make products like Fitbits and Apple Watches more appealing because they wouldn’t need to be plugged in (as long as you go outside). Products like this may expand soon as the conversion efficiency of solar keeps improving.
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Another new innovative method is transportation powered by photovoltaic energy. Railroads, planes, cars, and even roads can be powered by solar. A new solar-power aircraft called the Solar Impulse 2 recently made news when it flew across the Pacific Ocean. Solar cars are also being unveiled, especially in Australia, where the SolarSpirit model has become popular.
The commercial real estate industry is also finding new ways to harness the sun’s power. Windows that generate solar power are one new method, something that NEXT Energy Technologies installed recently at Patagonia’s corporate headquarters. It marked the first time NEXT’s window technology was demonstrated in a building. NEXT’s proprietary transparent photovoltaic coating transforms windows into energy producers. Patagonia’s HQ now has 22 windows that can produce between 20 to 30 percent of the power generated by conventional solar panels.
Leveraging such an underutilized surface area like a building facade means solar windows have the potential to generate a significant share of onsite renewable power. The windows capture and convert infrared light, also lowering a property’s heat load because of the shading qualities. Transforming glass into a solar energy generator is seen as a game-changer. Conventional silicon cells are too dense to do this, the idea required a breakthrough from a new organic thin film tech that’s sprayed or painted onto surfaces. This nano-thin coating enables windows to let daylight pass through while still converting the sun’s rays into electricity.
Another new solar-based technology that shows promise is Dutch-based IBIS Power’s offering, the PowerNEST, which combines wind and solar in a rooftop system designed for medium- to high-rise buildings. The PowerNEST has wind turbines with spinning rotors below a grid of solar panels that sit on top like a canopy. Solar and wind boost each other’s capabilities, and IBIS Power claims the technology can generate more than ten times the electricity of conventional rooftop solar panel installations.
The PowerNEST’s unique modular design uses the Venturi Effect to significantly increase the wind speed through the 3-kilowatt turbines. The Venturi effect is the drop in wind pressure when it passes through a confined area. For example, this happens when high gusts of wind blow through walkways between two high-rise structures. The bi-facial solar canopy captures more sunlight at more angles above and below while being cooled by the air. The company says it can silently (that’s a keyword with wind turbines on properties) generate enough energy to fully power an entire 15-story residential building. A 550 square feet space is required for one modular unit, but the more roof space there is, the more energy the PowerNEST can provide with more units.
Alexander Suma, CEO and Founder of IBIS Power, devised the system while working on his Ph.D. at the University of Miami in 2009. He was struck by how much air conditioning was used in Miami as he passed by stores with their doors wide open and the AC units blasting. “I saw how much energy was wasted there,” Suma said. “I thought that in a place as sunny and windy as Miami, there had to be a better way to do things.” Trained as an architect and civil engineer, Suma began thinking of ways to integrate multiple renewable energy sources into one product. His company has spent the past decade optimizing the design of the PowerNEST, and, humorously, got a big boost in interest after a famous social media influencer in Boston featured the system in a video.
One of the system’s advantages is that it can utilize 100 percent of the roof space because it rises 15 feet above roof level and allows room to access mechanical fixtures. A conventional solar panel array typically only takes up about 30 percent of roof space. Most of the company’s focus has been on multifamily buildings, but they’ve generated interest from all asset classes, and it can work on most commercial properties as long as there’s a flat roof.
Most of the company’s installations are in northern Europe now, with five in the Netherlands. Suma told me they’re looking to expand in the northeast U.S., especially New York City, where building owners face the looming Local Law 97 regulations. One property in Europe that has the system has generated 85 percent of the energy demand of the building. “Combining this with energy storage, we think we can make medium and high-rise properties completely energy neutral on the grid,” Suma explained.
We’ll see if the PowerNEST can penetrate the U.S. commercial real estate market, though the system looks promising. Given that so few commercial properties even have conventional solar installations, probably only the most forward-thinking building owners will turn to a system like this for now. The system also isn’t cheap. Installation is easy because of the modular design, but a recent Netherlands project cost €800,000 ($827,570). Suma said the expense is necessary if building owners want to ensure it’s structurally safe, meets building codes, and uses long-lasting materials.
While commercial solar installations may not be as common as we think, they’re accelerating. The benefits of solar energy are hard to deny at this point, and with prices falling so rapidly, we’re bound to see more installations in the coming years. The uses of solar energy in commercial properties may also start looking different than what we’re used to. From solar windows to innovative designs that combine solar with wind power, the commercial applications of this renewable energy source are changing fast.