Prices for Solar Panels: How They Are Determined
Solar energy is rapidly gaining acceptance among U.S. homeowners. According to a recent survey, there has been a more than 40% increase in solar power usage in 2013 alone. But while many people want to go solar, they are confused about the costs involved. Is solar power expensive? These and other questions on the prices for solar panel will be answered below.
What Constitutes Prices for Solar Panels?
The major component of a solar panel is silicone. The quality of silicone used in the photovoltaic cells largely influences the price for solar panels. For the most part, the higher the grade, the higher the price. Of course, this will be offset by the output of electricity. Moreover, as we shall discuss below, good quality silicone doesn’t necessarily have to be expensive. Apart from the panel itself, you also have to bear the costs of installation. These are the two major factors that will derive your total spending on solar panels.
Trends in Prices for Solar Panels
Not too long ago, the cost factor was the main argument against the adoption of solar energy in a residential setting. However, with the passage of time, prices for solar panels have come down to the extent that average homeowners can think about having one on their roof. Let’s be a little more specific.
In the second quarter of this year, prices of solar panel nationally were 60% lower than what they were back in 2011. On a general level, prices have almost dropped by half in the last 3 years. Without comparing with any year, prices for solar panels this year were down by 40%.
You know what this means. If you asked for a solar panel estimate 3-5 years ago, time to hit the market again. You will be pleasantly surprised.
How Demand Influences Prices for Solar Panels
There are many factors that can explain why the prices for solar panels have gone down over the years. For instance, solar technology advancement has reached unprecedented levels, so much so that it is now possible to make low quality silicone more efficient. This follows on from the previous point that good quality solar panels need not be unaffordable.
But more than that, the demand for solar panels is increasing, which is the why prices have now come down to competitive levels. Once again, to be specific, prices have gone down from $3.43/W to $3.05/W, an 11.1% decrease from 2012. And as far as demand is concerned, the installed capacity has reached 9.4 GW.
No discussion on the prices for solar panels is complete without making a note of the costs you save by installing solar energy in your house. For example, depending on the amount of electricity you produce, you can cut your electricity bills down considerably, even to zero.
Most importantly, homes with solar panels get tax advantages from the government as well. In other words, even if the prices of solar panels were high, the amount of money you save would have completely offset them.
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