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Michael Allen, co-founder of All Energy Solar of St. Paul, is grateful for a partly sunny 2020.
"All in all, it was a good year, but not the year we had hoped for," said Allen, 38. "We installed more than in 2019. The stress levels, thanks to COVID-19, were at an all-time high."
COVID postponed some projects, and there were workers who had to quarantine at home.
"Our safety director and our team was prepared, and I think we did an awesome job," Allen said of the 150 All Energy workers who design, build and service commercial and residential systems.
Overall, it was a soft year for solar installations for the state and country.
The national companies that focus on home-solar systems, such as Sunrun and Sunnova, reported hundreds of millions of losses during the first nine months of 2020, according to the New York Times. The year revealed growing pains for the capital-intensive, cost-competitive industry, which also counts on tax credits to spur demand.
Most of the growth in Minnesota is coming from developer contracts with utilities, whether big, commercial-scale projects or community solar gardens owned by groups of people.
David Shaffer, executive director of the Minnesota Solar Energy Industries Association, said firms came up against a difficult comparison because 2019 was strong.
"I do think installations were down," he said. "There was a giant pandemic … but people continued to install. And some important things happened that set the table for good years to come."
Shaffer projects construction of 340 megawatts of utility-scale and community solar this year, more than double the amount completed in 2019 or 2020.
And the solar industry, amid closing of old, polluting coal plants, is committed to grow production of Minnesota electricity from less than 2% to at least 10% by 2030. State and local utilities by 2030 aim to cut carbon output in half from 2005 levels and to zero by 2050.
Investors have flooded renewable energy with money since states like Minnesota set growth objectives. This month, Twin Cities-based Excelsior Energy Capital closed on a $504 million renewable-energy fund.
And the $900 billion federal stimulus law passed in December extended solar-energy investment tax credits by two years. That means new projects will continue to get a 26% investment tax credit through 2022. It will decline to 23% in 2023 and 10% in 2024.
Under the stimulus, the current federal wind-production tax credit will be extended a year. Federal tax credits have long existed to spur wind- and solar-energy development.
However, renewable power, thanks to technology advances and economies of scale, is often cheaper than natural gas-fired plants, according to analysts such as Wall Street investment bank Lazard.
Renewables also have grown rapidly over the last decade and now generate about 25% of Minnesota's electricity.
Renewable energy and conservation, from wind power to energy-efficient windows and energy-conservation software, also created 60,000-plus Minnesota jobs in recent years. At least before the 2020 recession. Those jobs were growing 2.5 times the rate of the overall employment market.
Moreover, wind and solar use free, clean fuel. Environmental and health costs traditionally were not calculated in the cost of burning fossil fuels, from greenhouse gases to respiratory diseases.
Allen started All Energy in 2009 with his brother, Brian.
Skilled workers, such as solar installers, make up to $60,000 a year and veteran electricians can earn up to $100,000, at a company with revenue approaching $35 million.
"We felt bullish about 2020 and we thought we would see growth of 18% to 20%," Allen said. "We didn't. We still sold more than one megawatt worth of projects in 2020 than 2019. That's enough to power up to 200 homes."
All Energy is increasing its mix, from 30%, toward larger commercial projects.
"There's never been a better time for businesses to take advantage of the available tax credits and depreciation benefits that solar provides," Allen said. "More companies are looking for ways to mitigate operating expenses. Solar is a safe way to do that. For homeowners, electricity costs are at all-time highs. With local rebate programs and extension of the federal tax credit, it's a great time to consider solar.
"The cost of solar systems is continuing to go down. We encourage people to 'own' electricity rather than rent it. Last year we built more than 1,000 solar projects in [numerous] states. About 70% were in Minnesota. We've been a steady-growth company. We look forward to up to 25% growth in 2021."
