Solar energy is now big business. As one commentator has noted, “Solar energy is so hot right now.” Part of that reality is that solar panel price has dropped dramatically over the years. This aligns with how the cost of solar energy itself has tumbled over the same time period. In order make best use of that good news, prospective purchasers of solar panels (at least as ‘end users’ for their own projects) need to factor in several key considerations in order to achieve the best solar panel price.
Doing so will also help ensure that the solar installation as a whole is optimized for delivering on its full potential for clean energy and financial return.
Solar Panel Price – Overall Context
The overall trend is one of steep drops in solar panel prices, almost continuously, from 1977 to the present. This trend has gone hand in hand with government incentives to create a boom in the solar industry, which in turn drives prices down even further. In fact, there is even a recognized name for this trend, called Swanson’s Law, named after Richard Swanson, the founder of SunPower Corporation, a solar panel manufacturer. This law suggests that solar panel costs will decrease by 10% on average each year. With that said, there are specific factors to examine in order to achieve the best solar panel price.
Solar Panel Quality
There are two main aspects to consider here: efficiency and reliability. Starting with efficiency, this is a topic that is rife with claims and data, which can quickly become very overwhelming. The irony is that it is easy to get carried away with solar panel efficiency, instead of considering the question of far more relevance:
Which solar panel provides the best mix of energy output for the given solar panel price? This is not something that can easily be determined in the abstract, because there are further factors. However, it is a key principle to bear in mind going forward.
The other aspect of solar panel quality is reliability. The good news is that there is now a wide choice of solar panels that carry a 25-year performance guarantee. Typically, this guarantees that the solar panel will operate within 90% of its full ‘as new’ capability for the first 10 years, and within 88% of its full capacity up to the 25-year point.
Relating Solar Panel Price to the Full Installation Cost
It has long been the case in the car industry that car dealers no longer make the majority of their profits from financing, then servicing the cars. Profits from actual car sales trail behind in third place, by a significant margin. There is a similar dynamic that has emerged within the solar industry. While it is only natural to search for the best solar panel price, the truth is, that is not where the major costs are incurred, nor is it where most of the industry focuses its efforts in terms of sales and profits.
These days, most of the cost of ‘going solar’ is in the installation, and other non-panel costs, like advice, planning and permission etc. As a result, when comparing solar panel prices, it would be easy to get lured in or simply distracted by the ‘headline’ solar panel price. Instead, it is far more advantageous to assess and compare the total solar panel cost, including installation and all other elements. These costs may be represented as a cost per meter, or in other ways, but the principle is essential.
(As a side note, many industries have organized themselves along similar business models, so this distinction is vital well beyond seeking the best solar panel price; it applies in any industry that combines buying a ‘thing’ that also requires a notable amount of service to achieve the desired results. This is just a fact of life in the current consumer and business environment.)
With this insight as a guiding light, the best perspective is to shift from a ‘solar panel price’ mindset to a ‘solar panel cost’ mindset, where the total project is assessed on its complete costs, compared to the projected energy and financial returns. To add to those considerations, it is vital to also consider one final factor: financial incentives.
Financial Incentives to Offset Solar Panel Price
Broadly speaking, there are two types of financial incentives that may be available, depending on location and the current commercial environment:
- Financing deals
- Government incentives
Returning to the analogy of the car industry, many commentators have noted that it would not be much of an exaggeration to view the car manufacturers as banks who just happen to sell vehicles as a reason for selling loans (and that is not meant to be a cynical view, just a different perspective). The point is that lending is a hyper-competitive business, and anywhere there is money being loaned, there will be deals on offer.
Given that solar systems are non-trivial investments, borrowing is often required. Therefore, it makes sense to get the best deal, including any incentives, for a particular financing package. This may go some way to making the solar panel price as attractive as possible.
In many countries and local regions, there are various incentives, including tax credits, grants and other programs. Many of these are very significant in financial terms, and it is a very wise investment of time to investigate these as part of the overall decision into what represents the best solar panel price (or, in fact, the most favorable solar panel cost for the overall investment).
On that note, special mention should go to Feed-In Tariffs, which have been a major incentive in many countries, so much so that they have been credited as a key driver for solar energy becoming a major force in the clean energy landscape, and the energy landscape as a whole.
Conclusions on Solar Panel Price
As can be seen, there are many factors to consider, and overall, the best recommendation is to factor these into a rounded decision, geared more towards solar panel cost as an investment.
Key references for this article:
- Most Efficient Solar Panels – Which Ones? – CostOfSolar.com – 1 Jul 2013
- SolarPower Europe Global Market Outlook 2017-2021
- Solar Investment Tax Credit (ITC) – Solar Energy Industries Association
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