This page will help clear up some confusion regarding the cost of solar panels.
Many homeowners’ initial research into finding some information on the price of solar panels for their home focuses too much on the panels themselves. This can lead to a considerable amount of confusion.
The fact remains that the cost of the panels is just one of many costs associated with getting a solar panel system installed on a home. Permitting, inspection, interconnection, and installation costs must also be accounted for.
Too much media attention is still drawn to stories revolving around prices for panels. Rarely do journalist tackle the total costs involved for a homeowner to switch to solar power. It’s great that production costs for solar panels have been dramatically reduced over the years. The bottom line is that further cuts in panel costs will not have a huge impact on the total overall cost for residential solar power.
Panels Only Part Of Cost
Prices are now at historic all time lows. While many manufacturer’s panels are a bit more, it is possible to find panels as low as $0.70 per watt as of early 2016. This can be misleading because a system’s total price is not as simple as adding up the number of watts needed by the price per watt. For example, a typical 5,000 watt system multiplied by $0.70 per watt would equal a price of $3,500. This is considerably less than what a solar power system actually costs. The price for the system in this example is closer to $15,000 than $3,500.
If prices for panels were to drop in half, the cost for that $15,000 system would only be cut by $1,500 or so. Decent savings, but nothing significant.
Efficiency Breakthrough Effect On Cost
There are also a constant supply of news stories about potential breakthroughs in solar cell efficiency ratings. Let’s consider a situation in which one of these technological advancements gets taken to market. Assuming the breakthrough involves cells that are twice as efficient as the most efficient cells that are currently in use. This would mean that only about half as many solar panels are needed on the average residential solar installation. The savings would be about the same as the previous example about the cost reduction in panels – about $1,500. There might also be some cost savings in labor as well, but not much.
The Big Picture
The point of the two examples just mentioned is that the residential solar power industry is beginning to mature to a point where prices are starting to level off. While we can expect to see a further reduction in the price of panels and improvements in cell efficiency ratings, the overall cost of getting a solar panel system installed should not be expected to decrease substantially in the coming years.
Ultimately, the only cost that homeowners should be considering is the total installed cost per watt of solar power. This is basically the full cost for a solar panel system. Go to the cost of solar page for more information on the total costs involved.
Smart homeowners are beginning to realize the long term value of solar power. The savings over the life of a system are substantial. It’s a simple choice – one can make payments (or pay cash) on a $15,000 system that will last at least 25 years or pay $30,000 or more to a utility for the same amount of power. In many U.S. states this is the case – conventional power costs twice as much as solar over the long term.