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.

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.

Group discounts for solar power?

Group discounts for solar power, offered through companies like One Block Off the Grid, are an especially smart move for a number of reasons.  First, the cost of solar panels is often off-putting to homeowners.  Second, the idea that other people in your neighborhood or region also are installing solar panels may give you an idea of community, or belonging, especially where some people still regard solar power as a “fringe” idea.

Dave Llorens, founder of 1BOG, comments:

“The idea was to put this online and deliver it to thousands of people at a time.  No one wants to have a salesman in their living room, they just want the numbers.”

In order to obtain group discounts for solar power for its potential customers, One Block Off the Grid screens solar contractors in regions that already offer solar subsidies.  The company then works with approved contractors to get them to offer a percentage discount when and if 1BOG brings a large enough group of customers.  If a deal is reached, it is offered on the One Block Off the Grid website.  The only “catch” is that the estimated number of people must agree to buy the panels in order to get the deal.  Usually, people looking to buy solar panels can realize a discount of about 15% in addition to a $500 rebate.

The cost of solar panels is usually much less using group discounts.  Mr. Llorens states that 1BOG only offers deals with a return on investment (ROI)  of 10 years or less.

Grape Solar CEO Ocean Yuan

A few weeks ago, we told you about how you could buy Grape Solar solar panels at the major warehouse company, Costco.

Now, this Oregon-based company is taking its product to a wider range of homeowners who want to go solar.

Residential solar panels from Grape Solar are available online at Amazon.com.  The ease of ordering these solar panel kits is matched only by the convenience of doing so.

Grape Solar panels are high-powered and reliable.  The kits at Amazon.com all include photovoltaic (PV) solar panels, racking system and inverter.  They are designed to be a grid-tied system.

Nine different sizes of solar panel arrays for homeowners are available at Amazon, ranging in price from $549 to $19,999.

The cost of solar panels is not the only consideration, however.  Consumers are encouraged to talk to a professional solar contractor to get an idea of how many solar panels to install on their home, and also to hire installation experience.  Not only can you save hassle and potential frustration, but a professional can help you maximize solar electricity output from your solar panel system.

Solar calculator gives you cost of solar panels

You want to convert to solar power, but before you plan to do so, what is the cost of solar panels?  There are several tools that you can use to help you calculate the expense of a solar system, based on the size of your building.  But before we get to the solar calculators, consider these fast facts:

• Solar Panels are 50% more affordable than 12 months ago
• There are many ways you can save money with solar energy, including improved home value and reduced energy costs
• For every $1 you save in annual energy costs with solar energy, the value of your house increases by $20
• Even if you don’t want to install panels, you can still rely on solar energy without the investment

We have found several solar calculators to use in determining the size and cost of solar panels you may wish to install.  Just click on the links below and follow the instructions.  Keep in mind that the resulting figures are only rough estimates and some do not include federal or state tax incentives or rebates.

Coolerplanet.com solar calculator

Kyocera Solar PV calculator

Solar-Estimate.org

Calculate your solar panel costs with online tools

Just remember that using a solar power calculator is only the start of your inquiry.  Prices for solar panels may vary from manufacturer to manufacturer.  Ask around and see if there are any specials or other discounts.  In fact, you may be able to save even more if you join together with neighbors who are also considering solar panels.  Group discounts can be negotiated by companies such as One Block Off the Grid.

Your true cost of solar power can be less (or perhaps more) than shown by solar calculators.  In a related post we reviewed the factors to be considered in determining solar panel cost:

1. Current utility bills, averaged on a monthly basis
2. Projected future utility bills, over your estimated years of ownership of the property
3. Amount you may save annually in electricity bills
4. State and federal solar energy tax rebates and other incentives, such as no money down
5. Type of solar panel system you want to install: PV Panels or Solar roof shingles?
6. Other potential energy savings, through energy efficient bulbs, shutting off lights, adjusting thermostats
7. Other potential energy retrofitting measures, including windows, insulation, Energy Star appliances, etc.

Solar panels are a significant investment, but one that you often hear people say that they are glad they made.  Use a solar calculator to determine cost of solar panels, but do a thorough investigation.  You could save even more!

Good luck!

Where to buy solar panels (image from clownfish on Flickr)

If you want to convert to solar energy, you have to know where to buy solar panels.  Fortunately, there are so many more options than there were just 10 years ago.  You can buy solar panels at a hardware store, through a distributor, or even find used solar panels at a great discount!  Finding solar panels for sale is so much easier these days.  Once you install them, you can start enjoying free solar power right away.

As we observed in a related post:

“Did you know that solar panels are for sale at many local hardware stores?  That’s right – you don’t necessarily need to shop online, nor do you need to find a specialty solar panel store.  Home Depot, Ace Hardware, Costco and many other chain stores now carry solar panels.  They also have relatively inexpensive (or free) assistance to help you select your PV system and perhaps even install it.  Some outfits even assist with tax rebate/incentive paperwork.”

Learn who sells solar panels

With government programs and tax incentives offered, more and more people are investing in solar panels for their homes.  Once you know who sells solar panels, you can compare costs and determine what system is best for your property.   When you choose a retailer carefully, they can help you get through the paperwork for potential financing options, as well as qualifying for government loan programs, and/or tax rebates.

Of course, some people don’t want to go through the hassle of buying solar panels at a retailer or online.  For them, a do-it-yourself (DIY) solar panel kit is the answer.  These often can help offset, but not entirely replace, “traditional” electricity.  Solar panel kits are also convenient for RVs and boats.

Finally, you can join a group of other property owners who are also considering going solar.  By doing this, you can negotiate a group discount for solar panels, which can be done through businesses like One Block Off the Grid.

In short, its easy to find out where to buy solar panels.  The bigger questions will be, what can you afford, what type of system do you want, and what are your overall goals for going solar?

Good luck!

Interested in solar panels for your home?

Solar panels for your home are a great investment to make, both to help lower electricity costs and improve the value of your residence.  Did you also know that its a great time to install solar panels, given the significant tax credits and rebates currently being offered?

Whether you want to build your own DIY solar panels, put together a solar panel kit, or purchase a solar array, it is much easier to find residential solar panels than it was a decade or so ago.  This means several things: (1) you can get a better price, with more competition, and (2) you can find more reliable solar contractors.

If you’re considering solar panels for your home, you are definitely not alone.

Many types of residential solar panels on the market

Depending on the size of your roof, your budget and aesthetic preferences, you can install a photovoltaic panel array, or even invest in solar power roof shingles to help generate clean, free solar energy.  You may also want to consider solar thermal panels, which can defray your hot water bills each month.

The upfront cost of solar panels – prior to government incentives – varies from $200 to over $20,000.  Again, this will depend largely on the type of panels you install (PV or thermal), the size of the system, and the extent of work that you will put into the project, from construction, wiring, installation, etc.  How quickly you recoup your investment also hinges on the amount of your electricity use, the rising rates of grid-based electricity in your region, and the increase in home value that many see from a correlated drop in annual utility bills.

Many solar financing options are available if you are serious about solar panels for your home.  You can elect to buy or lease solar panels, and may want to take advantage of a no-money-down program, or even financing through local governments and/or utilities themselves.

Take a look at your monthly electricity bills and estimate both your current and projected annual utility costs over a 5-year period.  It may make sense for you to move forward with residential solar panels, with most payback periods ending within 10 years.  Plus, how great will it feel to see your electricity bills drop 200-300%, or more (one homeowner now has monthly bills of $18, down from over $200). That’s not something you can put a price on!