Acquisitions in the solar industry are expected to rise. The federal investment tax credit will reimburse 30 percent of development costs for all solar projects. When this number goes down to 10 percent, many companies will have a hard time remaining competitive. Horwitz now expects consolidation which will lead to about 6 to 12 large solar conglomerates that will be able to beat utility prices for power.

According to Bloomberg New Energy Finance, the US solar development is expected to double by 2016 to 9.6 gigawatts (up from about 5.1 gigawatts this year). This will be followed by an expected drop in new construction to 4 gigawatts in 2017 and will take about 6 years to recover.

NRG Energy Inc., the largest US power producer, already purchased three solar companies this year and it expects more companies to start doing the same.

In the next year, the residential solar market will thin out very quickly,” Crane said. “There will be three or four companies going for a national footprint and brand name, and they will have roughly 70 to 80 percent of the market. You have to be vertically integrated.”

SolarCity Corp. (the largest US rooftop developer) is doing just that and becoming more vertically integrated. The company bought Silevo Inc. (maker of solar panels) which gives SolarCity a wide supply of gear. Many other companies are following this example and are trying to become more vertically integrated. A sell-off in solar stocks may make future acquisitions cheaper since the Bloomberg Industries Global Large Solar Index has declined 27 percent this year.

There’s no doubt the [solar energy] industry will be consolidating this year,” he told PBN by phone in Denver. “It’s starting to happen already.”

Additionally, solar power systems can decrease your electricity bills by 50 to 90 percent. While utility rates grow, clean energy remains consistently free.

Read more here – “Solar Consolidation Expected as Tax Credit Drives Deals,” (Christopher Martin, Bloomberg).