Oct
12
Over the last year the price of a solar installation has been dropping significantly due to growth in the manufacturing sector, particularly in China. However, the variation in prices seems to be primarily in the cost of the solar panels themselves rather than in the cost of the overall systems. Solar panel prices have dropped an astounding 42% thanks to new cheaper technologies and a flood of inexpensive panels manufactured by factories in China. The cost of the solar systems, on the other hand, has dropped by a more modest 24% according to one industry leader in the Southwest.
Either way you look at it this is excellent news for consumers and an overall market that has been struggling with extraordinarily high installation costs for years. Yet the difference in price between the modules and the systems has caused some consternation, leading journalists and industry professionals to speculate about its causes. One major theory as to the difference is due to time itself, since many businesses will purchase solar panels in bulk one month and wait many more months before installing them. Another major point is that the actual solar panels only account for less than half of the overall solar installation cost. The other half is composed of materials costs (aluminum and copper have not dropped in price, but rather risen sharply) and labor. Solar panels may be manufactured faster and for less money, but the labor has not gotten much more efficient or fast in the mean time.
Still, all signs point toward continued, if gradual, drops in price for the foreseeable future. Given current trends the costs associated with installing new solar panel systems in the future will be much lower than they are currently, and improved financing programs like the current Federal tax cuts and the PACE energy program will offer more people and businesses access to the programs than ever before.