How Far will Prices for Solar Panels Drop?

After several years of strong solar industry growth, the tide has turned briefly as supply of solar panels currently exceeds demand and governments have begun to curtail generous tax incentives and rebate programs.

Is this the beginning of the end?

Not even close!

According to a published report analyzing McKinsey research, the solar industry is merely experiencing some growing pains and will soon be out of the awkward “teenage” years.

The report, entitled, “Solar power: Darkest before dawn” projects that the average cost of solar panels will continue to drop as it has in recent years -  40% by the year 2015, and an additional 30% by 2010. At the same time, solar manufacturing is expected to double to meet demand, allowing companies to reap impressive profits notwithstanding lower prices.

This growth, over the next 20 years, will stem largely from demand based on viable stand-alone economics in five customer segments: off-grid, residential and commercial in areas with good and moderate sun conditions, isolated grids, peak capacity in growth markets, and new large-scale power plants

Can you imagine a 70% drop in prices for solar panels in just the next 8 years?

The best part is that the falling cost of solar panels and predicted industry changes will benefit consumers, as well as companies that adapt with reducing their overhead costs to maintain healthy profit margins.

Plug in solar panels from Clarion

Plug in solar panels will allow property owners to begin generating clean, renewable solar power immediately.  No need for wiring or solar inverters because the Smart Box Solar device has a micro-inverter.

A single 200 watt panel can offset enough grid-based electricity to meet an average residential home’s lighting needs for an entire year.  You can add additional panels to your system to generate even more solar power.

Installation takes only one hour.  Connect the device to an existing circuit and then, once you plug in the solar panel into an existing outlet, you can start saving energy and money.

The cost savings resulting from Smart Box Solar will pay for the cost of the device within five to eight years, a shorter return on investment than associated with regular photovoltaic (PV) solar panels.  With solar rebates and tax incentives, the ROI may be even shorter.

As of the date of this publication, the Smart Box Solar Module from Clarian is not yet available for consumers.  However, recently, the United States Department of Energy pledged $5 million toward additional research and development of plug in solar panels like Clarian’s.

We should soon see homeowners tapping into convenient solar power as easily as plugging in an appliance.

Hybrid solar panels

But now, a hybrid solar panel can generate solar electricity and solar hot water at the same time!  Virtu, a hybrid solar panel, has been invented by UK renewable company Naked Energy.

Richard Boyle, the Chief Engineer at Naked Energy, developed the hybrid solar panel technology, which combines PV solar cells that generate electricity, and solar thermal panel that generates hot water.

The solar technology works by using the downside of PV solar cells (a decrease in efficiency as they get warmer) to transfer excess heat from the PV cells to heat water.  Solar electricity generation rises as excess heat is transferred to warm water.  When the PV solar cells are cooled, they maintain efficiency.

In short- its a win, win for the solar technology and consumers!

But there is another form of residential solar power that is both affordable and efficient:  solar thermal panels for solar hot water.  Just like PV panels, solar thermal panels require exposure to sunlight.

Solar hot water via solar thermal panels

Even at lower ambient temperatures, sunlight that falls on thermal panels can heat domestic water via a solar hot water system.  In other words, you don’t have to live in California or Florida to generate hot water with solar energy!  People throughout northern regions of the U.S. and in European countries like Germany enjoy free hot water from their solar panels.

There are several different methods for heating water with a solar thermal system, some of which are specifically designed for areas that experience frost and lower temperatures.  The savings from solar hot water can really add up, too.  By replacing a gas or electric hot water tank with a system using solar thermal panels, a household can save $500-1000 each year.

Because solar thermal panels are less expensive than PV panels, the return on investment is shorter, as well.  At current energy prices, expect an ROI of 8-10 years.  However, if utility rates further increase, a homeowner with solar hot water is protected against such spikes and may achieve payback for the system in 5-7 years, or less.

Solar installer jobs in Northern California

Solar installer jobs in Northern California are frequently posted on Craigslist, where prospective employees can easily locate the positions.   In fact, no matter where you live, searching Craigslist for green jobs can result in potential, higher paying jobs.

Solar installer jobs in Northern California, and other places, require the ability to complete the following responsibilities:
• Pulling inventory for installation jobs
• Pre-assembling job components in a warehouse
• Layout and assembly of solar modules/array and mounting hardware
• Mechanical/structural mounting of racking, modules and electrical equipment
• Electrical wiring of solar array/system
• Documenting completion of completed installation
• Attending mandatory training sessions on products, installation methodology and safety

Requirements for a solar installer job:

•Experience in PV installations, roof work, general construction, or carpentry
•Basic understanding/experience with electrical wiring of AC and DC systems
•Experience with hand-held and power tools
•Experience working with all types of building materials – various roof types – stucco, wood, concrete, etc.
•Ability to work in extreme environments, e.g. hot sun, crawl spaces, etc.
•Must be able to lift a minimum of 50 lbs.
•Must have a clean driving record
•Must have knowledge of OSHA compliance standards or familiarity with formal safety practices

Do you or someone you know have these qualifications for a solar installer job, or another green job?

What is the cost of solar panels?

Let’s face it.  If you are considering a residential solar panel system, two of your biggest questions are probably (1) what it will cost to purchase it, and (2) how much will maintenance cost?

For the average homeowner, the retail cost of a solar array can range from $15,000-50,000, depending on your power needs.

But with tax incentives and rebates offered by many governmental entities and some manufacturers, your out-of-pocket expenses associated with installing solar panels can be reduced by 80% or more.

You can also reduce expenses associated with switching to solar power by cutting down on energy usage, or by choosing to offset only a portion of your electricity bill with solar.  The fewer panels you purchase as part of a solar panel system, the more you can save.  If your initial solar array is not enough, you can always add more panels to it in the future.

Some homeowners choose to lease solar panels instead of purchasing them outright.  There are a variety of contractual arrangements that may be offered by solar manufacturers whereby the solar array is installed on your property, but the company continues to own and pay for maintenance of the panels.  In turn, you purchase reduced cost solar electricity at a fixed rate over the life of the lease.

Financing solar panels is another option.  Property Assessed Clean Energy Loans allow you to pay for energy efficient upgrades like panels via a property tax increase – usually with no money down.

When it comes to maintaining a solar panel system, the cost is negligible.  Components are manufactured for a lifetime of 25-35 years.  As long as the panels are kept clean, they should continue to function without issue for many years.

The bottom line is that the answers to questions related to solar panel system costs can be summarized by: “it varies.”  Yet, homeowners should not be dissuaded from solar power by potential costs. Over the long run, switching to solar electricity will save money, protect against rising energy costs and also cut carbon footprints.

Solar panel leasing considerations

Market experts predict that in 2012 a wider variety of arrangements will be available.  Homeowners should consider comparing lease options before committing to a 25-35 year lease with any particular company.

Generally speaking, a solar panel lease involves installation of an array on your property, while the company itself retains ownership of the panels and equipment.  Because you are not purchasing the panels, solar panel leasing often requires no, or little, money down.  Instead of paying off the cost of a solar array, you pay a monthly fee to the company that owns, maintains and insures the panels.  Such fee is lower than the monthly cost of electricity you would otherwise be paying for.

So what should you consider in comparing solar lease options?

1.  The installers and solar panel manufacturers you will be dealing with through the leasing company

2.  System performance and maintenance guarantees provided under the lease

3.  Dependability of service and reputation of companies with which the leasing company works, based on customer reviews

4.  Degree of flexibility in lease terms – a longer lease with slightly more money down will usually result in more monthly savings than a short lease term with no money down.

5.  Whether the state in which you live has renewable portfolio standards that rewards owners for solar electricity generated by your system (create SREC markets) and, if so, whether you are entitled to ownership of the SRECs after the end of the lease (since they are usually retained by the leasing company through the duration of the lease).

Refer to this overview of factors to consider when comparing lease options for solar panels.

Net Zero Energy House with Solar Panels

This amazing house in Ann Arbor, Michigan (shown to the left) is 110 years old and yet operates without the use of any grid-based electricity.  Its owners decided to install solar panels for a net zero energy house.

While net zero homes (residences that generate all the power required for their operation on site) are becoming more popular, the home above is the oldest net zero energy home in the U.S.

Following extensive refurbishing and retrofitting, the roof is covered in solar panels that generate 12,500 kilowatt-hours (kWh) each year.  Of that, only 10,000 kWh was required to keep things running and the balance was fed back into the grid via net metering.

If you are considering installing solar panels on your home this year, keep in mind that prices are lower than ever – about 50% less than just a few years ago.  In addition, solar tax rebates and other incentives will be phased out in the near future, so act now!

This net zero energy house cost about $47,000 to renovate, saving the owners thousands each year on utility bills.  In addition to rooftop solar panels, additional insulation was installed, along with insulated glass.  Low pressure plumbing minimizes water usage, too.

To learn more about net zero energy houses and how these Michigan homeowners installed solar panels on their 110-year old home, watch this video:

Consider a DIY solar panel kit

For many homeowners, the idea of switching to solar power is daunting from a cost and hassle standpoint.  But if you want to test the waters with renewable energy, why not start with a DIY solar panel kit?

Solar panel kits include everything you need to generate and use solar electricity:  solar panels, an inverter and charge controllers.

Its all in one box, which also contains step-by-step directions to help you install solar panels without hiring and paying for a professional solar installer.  Most people can complete the project in a weekend.

The advantages to going with DIY solar panel kits include: (1) lower cost; (2) flexibility – you can add more panels in the future as needed; and (3) the satisfaction of building your own solar panel array.

On the other hand, disadvantages of solar panels kits are: (1) limited or no warranty or support; (2) may not be permitted to tie into the grid for net metering; and (3) may not be fully eligible for solar tax rebates and incentives.

Have you installed your own DIY solar panel kit?  We’d love to hear your comments about advantages and/or disadvantages of these build-your-own solar kits.

How are your solar panels performing? Find out with an energy monitor smartphone application

Once you have made the investment to install solar panels, you’ll want to maximize their efficiency and output.  If shade, snow or technical issues are reducing the amount of solar electricity generated by the system, you’ll want to know right away.

You can now monitor your residential solar panel system with a smartphone application.  Its a home energy monitor right at your fingertips!  Developed by a solar photovoltaic (PV) manufacturer, SunPower, the Android application provides instant information for customers regarding: (1) energy output of a residential solar panel system, (2) their home’s energy usage (hourly, weekly or monthly) and (3) the ability to compare and share previous data.

Any SunPower customer can access this same information via the company’s website.  But the energy monitor application allows the kind of instantly available information so many of us desire so you can make adjustments to consumption or order repairs to your system, as necessary.

Perhaps the best feature of this new application is you can show off your significant savings via your residential solar panel system to your co-workers and friends — right from the palm of your hand on your smartphone!