Much has been written on this site regarding the cost of solar power and future pricing expectations.
The point of this particular post will be to take yet another look at the price of solar in light of a reasonable expectation of what the solar landscape will look like in the coming years. In addition to solar pricing, net metering and energy storage will be addressed.
There are surely many homeowners who are on the fence about going solar. Many of them expect that the price of solar panels will miraculously drop considerably in the not too distant future. Due to the cost structure of going solar, this is simply not realistic at all. See the bottom section of the cost of solar page for more information on that. Another expectation is that it makes more sense to wait for more moderate pricing reduction. Here’s a post on why that is not a good idea either.
Perhaps the most common solar power story found in the news of late revolves around net metering. Quite a few people may be unwilling to take the leap into a long term solar investment not knowing if their utility will change net metering rules. What happened in Nevada was extraordinary and not likely to occur elsewhere. In fact, that decision is being fought and a compromise that benefits solar customers should be an expected outcome. Some states that are currently re-evaluating their net metering policies may end up making a typical homeowner’s investment in solar simply take a bit longer to pay off.
Most states have aggressive Renewable Portfolio Standards which requires their utilities to produce a certain percentage of their electricity from renewable sources. Residential solar can help these utilities meet their goals, especially when no large scale solar projects are on the books. In this way, net metering policies that benefit solar homeowners should be preserved.
Taking a slightly longer view, home energy storage solutions will take the place of the current need of net metering to make solar cost effective for homeowners. As been recently written, companies are already working on delivering lithium ion battery storage products for homeowners and businesses alike. Lead acid batteries have helped individuals with off grid solar set ups for decades now. Pricing and technological advancements are making the transition possible for lithium ion to replace lead acid.
While companies are starting to make these new battery solutions available to the general marketplace this year, the cost of energy storage can be considered a bit too expensive for many parts of the country. However, pricing is expected to fall considerably in the coming years. At that point, these devices will not only be used for a couple of hours of emergency back up power or help with peak energy shaving, but as a significant and long term source of power after the sun has set.
The cost of solar plus storage can easily double the payback time period of just going solar alone. So instead of a nationwide average payback of about 10 years with solar, it would figure to take an additional 10 years for a battery backed up solar panel system to pay for itself. The good news is that, like previously mentioned, a slight decrease in the cost of solar and a significant decrease in the cost of energy storage will greatly reduce this payback period in the coming years.
So any homeowners currently on the fence about going solar should know that now is a great time to go solar. Pricing can’t get much lower and cost effective home energy storage can be added in the near future to further protect the value of an investment in solar power.