Reflecting on the Hottest Energy Industry Trends in 2014

Early last year I outlined predictions on some of the bigger trends that I thought were going to shape the retail energy industry. It’s time to take stock on how I did.

In 2014, predictions alluded to the following: 1) the pace of U.S. solar deployment would hasten, 2) energy storage would become ‘the next big thing’, and that 3) end-use electricity consumption would remain flat or decline. So what happened in each of these areas?

1. Solar’s banner year: A near all-time quarterly record for installed photovoltaic (PV) capacity was set in Q3 2014, with 1,354 MW representing a 41% increase over the same period in 2013. In addition, total capacity coming into production for the first nine months of the year outpaced the same period in 2013 by nearly 50%! Q4 2014 installed capacity figures are still being tallied, but it’s safe to say that the industry continued to pick up the pace of growth.¹
2. Storage has its big debut: Thanks to Elon Musk’s decision to build a “gigafactory” in Nevada, which is currently under construction, the energy storage industry got a much needed publicity boost last year. More importantly than the limelight though, the Tesla factory, which is expected to produce enough lithium ion batteries to power 500,000 Tesla’s by 2020^2, will bring economies of scale to battery materials, processes, and ancillary industries that has never been seen before in that sector. This could have many ripple effects for homes and businesses, and some industry analysts are even predicting that one day soon, we will all have storage equipment in our homes and offices the way we have furnaces and hot water heaters today.
3. Energy consumption stays flat: Full-year figures from the U.S. Energy Information Agency  are not yet available, but based on 2013 data, end-use electricity consumption continues to decline although it fell less between 2013 and 2012 than in the previous 12-month period.³ The fall in consumption was very minimal, coming in at -0.0003% but it does repeat a trend that started in 2008. Electricity consumption has now fallen consecutively over the past three years, and five times out of the last six years. For energy suppliers, this means they can’t rely on incremental growth in demand anymore and will continue to compete more aggressively on price and solutions that add value to business and residential customers.

Keep an eye out for my next article where I’ll look at the trends we as a company are watching closely in 2015, and what they mean for the industry and your business going forward. With the sudden collapse of oil prices, an industry shakeup from the Polar Vortex, and a revitalized interest from government in our industry, there will be a lot to talk about this year!