Solar panels  right now are  cheaper than ever, but it won’t be like that forever

The Solar panels price is now lower than ever before, but it is expected to rise in the future.

The study from EIA (Energy Information Administration) shows that right now, in 2018, the solar panels price is lower than ever before, but we cannot ignore some signals that it is going to rise in the future.

How the popularity of solar power has grown over the years

Unless you have been living under a rock, you are aware that solar power is a booming industry in the U.S.

There are many qualities that make solar power attractive for residential customers and  commercial consumers alike – it’s reliability, sustainability, and ability to reduce energy consumption and utility costs being just a few of them.

Over the previous years, the cost of solar electricity and solar installations has declined significantly, making them more affordable for homeowners.

A decade ago, a home with solar panels on its roof was a rare and solitary sight; now you can see solar panels everywhere you go. Houses with solar installations are popping out like mushrooms after rain.

The reason for that is simple. The solar panels are way cheaper now than they were ten years ago. And solar power is a great way to save money and improve your home’s value, not to mention the benefit it has on the environment.

So, we have been witnessing the constant decrease in the price of solar panels over the years, thanks to technological improvements both in the design and the manufacturing process, that were forced by the urgent need for clean, renewable energy sources.

How has the solar panels price changed over the years?

All of those things are the cause why the solar panels price has been decreasing rapidly in the last ten years. But it won’t be like that forever.

A comprehensive analysis done by the EIA shows how the price of solar panels has been continuously going down year after year, in the past decade.

It is showing that the solar panels price has been consistently dropping at a rate of about 10% to 20% per year, without exception so far.

The most recent report focuses on the period of the past three years, from 2013 to 2016, and it’s showing not only that the solar energy is the world’s fastest growing energy resource in 2016, but it’s providing an in-depth analysis of all the changes and fluctuations in prices of solar panels over the years.

For example, in 2013, the cost per kilowatt of solar power was around $3,700, significantly more expensive than in 2016, when it was a little less than $2,500 per kilowatt. To put this into perspective, now in 2018, homeowners are paying an average of $3.14/W and a decade ago, in 2008, the cost of solar power was more than $8/W.

Why is now the right time to install solar panels?

Of course, we are all aware that the price of a home solar system includes more than just panels. The photovoltaic system consists of many parts, including wiring, racks, an inverter, and other things as well. When you decide to install the solar power system, the price also depends on labor cost and your system’s size.

We can say with great accuracy that solar panels account for about 35% of the total cost for a home solar power system.

Since it is not likely that the labor price will go down anytime soon (or the price of any other included components), any variation in the price of solar panels is an extremely important factor in determining the overall price for a home solar system.

The trouble is that, as we speak, the solar panels price is rising.

So, we are now caught in the opportune moment, when the prices for solar installation in total are lower than ever before, but the possibility that they will rise in near future is hovering above us all.

Why are the prices for solar panels rising?

The answer is simple – Solar Tariff 2018.

For those of you less aware, on January 22, 2018, President Donald Trump announced his approval of a 30 percent tariff on all imported solar modules and cells, meaning that all imported solar components are now 30% more expensive.

The majority of solar panels are currently imported from China at low prices (before the Tariff), with only a small portion of domestic needs being satisfied by home production on U.S. soil. The Administration explained that with this action, they are trying to stomp on China’s influence on U.S. economy and encourage increased production in the U.S.

However, the fact remains that the infrastructure at its current state is not nearly developed enough to cater to all domestic needs, meaning that we will still have to rely on imported products, only this time at higher prices. Experts argue that these new renewable energy blockades are just another attempt of driving consumers to fossil fuels like coal again.

It is not our place to discuss politics, we are merely stating the fact that from this year there is an increase in the price of solar panels and other solar components that is not likely to be lifted in the near future.

How do these changes affect homeowners?

The good news is that the homeowners will be the ones least impacted by these changes. The most of the blow goes directly to the companies and solar installers that are relying on imported products alone, and this decision has already made many of these companies close their doors.

Solar Energy Industries Association (SEIA) estimates that this decision caused nearly 23,000 solar installers to lose their jobs nationwide. But for the homeowners themselves, the price won’t be this costly. Thanks to residential grants for solar power homeowners will be hit with less than a 10% increase in price, comparing to the full blow of 30% that is hitting the companies.

It is estimated that the price for a typical residential system will rise between 4.9% and 6.8 % in this year, which equates to 15-21 cents of increase per watt installed.

However, these estimations are valid for this year alone, and it is still difficult to predict whether the prices will go up or down in the future.

Why is it important that you take action now?

There is also one more important thing to remember, and that is that the thing which made the majority of solar installations possible – the Solar Tax Credit – is set with an expiration date of December 2019. (If you want to learn more about Federal Solar Tax Credit and how it works you can always follow the link here ).

We are sure that you have heard of people who benefited from the 30% incentive, but not many homeowners are aware that this benefit is not a long-term one, but subject to changes and reductions starting from 2020.

In summary, until December 2019 the homeowners will be able to enjoy the full 30% discount rate on all solar installations, while starting from January 2020 the level of the Solar Tax Credit will be reduced to 26%. This amount will be then systematically reduced each year until it reaches its fixed level of only 10 % in the year 2022. Which will then remain permanent.

So, if you ever planned to reap benefits from federal solar tax credits, and avoid any possible rise of prices in the future, then there is no better time to act than now. Remember, the clock is ticking.

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