Solar Panel Costs At An All-Time Low – Time To Take A Shine To Solar Energy

Solar Panel Costs At An All-Time Low – Time To Take A Shine To Solar Energy

Solar energy has had a reputation of being an expensive form of renewable energy, due to the high average cost of solar panels as well as high installation and maintenance costs. But as technology develops, and a lot of research is being conducted in the field of solar energy, the costs have shown to be dropping. How much do solar panels cost today, and how high are the solar panel installation costs?

Evolution Of Solar Panel Costs

Solar cells have existed as a concept since the early 1800s, but the first actual working solar cell was invented in 1941 by Russel Ohl (EnergyMatters). Of course, the technology was very inefficient at the beginning, which made the average cost incredibly high. However, thanks to intensive research, the technological advances have been incredible since then; an article on CleanTechnica shows that in the last 40 years, the cost of solar cells has decreased to less than 1% of the price per watt in the late 1970s. Solar energy efficiency is improving every day.

This rapid decrease in prices does not come from the invention of new products, but from the constant improvements of the existing technology. There has even been a term coined specifically for the cost decrease. “Swanson’s Law” states that there exists a learning curve in the production of solar panels and that as the total volume produced doubles, the cost decreases by 20%. Other factors leading to lower prices are the increased automatization of the production process, as well as the huge expansion of solar production in China, which pushed the prices down worldwide. (Crooks, 2016)

Solar Panel Cost Today

The average cost has consequently decreased substantially, but how much do solar panels cost? The cost of solar energy for the consumer is usually measured in cost per watt. For a more tangible example: today, in 2019, the price for buying and installing panels adequate for a standard household in the US (a system able to produce 6 kW, i.e. kilowatts), lies somewhere between $11,000 and $15,000. For a household in the UK, 4 kW is deemed average, estimated to cost the owner around £7000.

For EU countries, there has been a quite recent, positive development in the average cost of solar panels; in 2018 the European Union abolished all import tariffs on panels from China, which of course lowered the prices significantly. According to PV Europe, the removal of solar panel tariffs is estimated to lower the solar panel cost in the EU by around 30%.

In Europe, the country with the most installed PV systems in 2017 is Germany, despite its relatively low amount of yearly sunlight compared to countries closer to the equator (International Energy Agency, 2018). This might sound peculiar, but it perfectly logical since solar energy is the cheapest way to generate electricity today, with a cost as low as 3.71 cents per kWh, according to the German institute Fraunhofer ISE (Clean Energy Wire, 2018).

For Europeans, solar energy is also the most popular form of energy – according to Hemetsberger, the popularity stems from the flexibility and also from the fact that it in many cases is the cheapest form of energy. This, in combination with emission targets within the EU, there is an expected increase in demand. Already in 2018, the European market for solar energy grew with a massive 36%.

With all the benefits from solar energy; from the low environmental impact and low noise pollution to the flexibility and reliability of the systems, it is no wonder that many governments and state-owned programs want to subsidize consumers, therefore further reducing the solar panel costs. Some countries even make it possible for the owners of photovoltaic systems to sell back electricity from solar energy to other users through the power grid.

Solar Panel Installation Costs

When considering transitioning to using solar energy, to estimate your solar financing, you will have to take some installation costs into consideration. For a private household, expert evaluation of the needs of the property might be necessary, in order to install the optimal number of PV systems. Generally, the variation in installation cost is low but it depends of course on the need of the consumer. However, the installation costs are subject to economies of scale – it is relatively cheaper to install several panels at the same time for the same property, as the installation cost per unit is decreasing this way.

One solar panel installation cost is e.g. the electrical work, which usually requires a professional unless you have electrical experience – an estimation suggests that the average homeowner with some experience could save around 25% by installing them by himself. A factor that could slightly increase the cost of installation is whether you want to also have access to the electrical grid, e.g. to be able to use electricity during the night during cloudy days.

Another way to affect the installation cost is to decide on what kind of mount is best for your property; a fixed, adjustable or a tracking one, starting from around $10 for the fixed one, with the disadvantage of not being able to adjust it for changes in weather and the sun’s position. The efficiency could be increased with an adjustable or a tracking mount, in a price range from around $50 to over $3000. And with more moving parts there is a naturally higher risk for costs in the form of maintenance and repairs as well.

Other Costs To Take Into Account

Today, PV systems have a long lifespan of around 25 years, some newer models even up to 50 years. The cost of replacing a panel is usually on a similar level as the initial installation costs. Certain parts of the panels usually have a warranty between 10 and 25 years, but except for when it comes to problems related to manufacturing, the owner is usually responsible for the cost of repairing, maintaining and installing the panels. Common repairs and problems include a cracked or broken panel, something that could cost around a couple of hundred dollars for labor and replacement parts, while connection problems usually only require the labor costs.

Factors that affect your maintenance costs are the location of the PV systems; easy access on the ground, as opposed to a steep roof, will induce fewer costs. A very advanced and large system usually also require higher maintenance costs, simply because of the sheer time it takes to inspect the panels thoroughly. In areas with little rain or high pollution, it will be necessary to regularly clean the PV systems to ensure that they are as efficient as possible.

How Much Do Solar Panels Cost?

With a brief, estimated overlook of average costs of solar panels as well as the solar panel installation cost, it might at first seem as if solar energy is an expensive way to provide energy. But the fact is that in an increasing number of places, solar energy is currently the cheapest way to produce electricity:

  • Many factors have affected the radical drop in solar panel cost in the last 40 years, but technical advances play a huge role
  • Measured in cost per watt, solar panel costs have shown to pay off in the long run, which also shows in the enormous European market growth in 2018
  • Installation costs are usually included in the price, and depending on household size and needs, these can be lowered e.g. through the choice of mount, and the efficiency can be increased through keeping the panels clean

Without even looking into the numerous other benefits of solar energy, like the insignificant impact on the climate, solar panels are an excellent way to provide energy economically, despite the relatively large initial investment. The technological advances and the market growth in the last few years cannot be overlooked, and everything seems to point toward a continuous expansion of solar energy production.