Below is an article written by Mosic/Lawrence Berkeley National Labs, Tracking the Sun VI: An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2012, 2013.
Since it has been written, three years have passed and the cost of solar has bottomed out and holding steady. We are now seeing slight increases due to global demand, now is the time to consider a solar system.
"Today, the average solar panel costs around $1,000 per panel to install. A typical home will have 10-20 panels, resulting in a total cost of around $20,000. Figuring out the exact cost for your home can take a little bit of work to factor in different electric rates and any rebates or tax credits available to you. Fortunately, it’s easy to set-up a quick 5 minute phone call with a representative from any of the major solar companies to help you price your system and estimate your potential savings. If you don’t want to front the money, you can pay for your solar panels just like you bought your house – with a home solar loan. The only difference? A home solar loan requires no down payment, meaning many people start realizing cost savings right away!
You may be surprised to learn that solar is this affordable. After all just a decade ago it was seen as nothing but a pipe dream of a few greenies out west. Today is an entirely different story – Warren Buffet has invested over $7 billion in solar, and solar comprised over 30% of all new electricity added to the nation’s grid in 2013.
Why has the cost of solar fallen so rapidly? It’s fairly straightforward. The story about the falling cost of solar can be broken into two halves: the cost of the actual solar equipment and the so-called “soft-costs.” The equipment costs include solar panels, inverter (which converts the power from DC to AC so you can connect to the grid), racking equipment to attach the panels to your roof and the wiring to string it all together. The “soft-costs” including things like permitting, operations, monitoring, and the actual labor needed for installation. Let’s start with the equipment costs.
The Cost of Solar Panels Have Fallen
When solar panels first came onto the market in the mid-1970s, the average cost to produce one watt of solar-generated electricity was over $75. In 2013, the same watt of power costs only 74 cents from a solar panel. The reason? It’s the same phenomenon that the world has seen with computing power — the cost of a smart phone today is a fraction of buying a computer 20 years ago, yet the capability of the tiny handheld device is astronomically greater than it ancestors. Analysts have confirmed that PV technology is improving at an exponential rate in terms of cost effectiveness for the energy produced. There’s an interesting distinction here – the cost per panel has decreased exponentially, but the panels have not become exponentially more efficient. This means that the solar technology on your neighbor’s roof is largely the same, boring, no moving parts, technology from 30 years ago, only at 1% of the cost.
Solar “Soft-Costs” on the Decline
The “soft-costs” comprise the other half of our falling cost of solar panels story. This half, the installation labor, permitting, operations, maintenance, etc, is also falling in cost. A survey of over 200,000 PV installations in the United States between 1998 and 2012 concluded that installation costs (including everything but the price of the panels) dropped by 38 percent for systems producing 10 kW or less. The survey, which represents 72 percent of all PV systems tied into the electricity grid nationwide, also found that over the course of 2012 alone the average cost of a fully installed system dropped anywhere from 6 to 14 percent, depending on the size and geographic location of the system1.
Reaching the Cost Tipping Point
A generation ago, the cost of solar panels was so great that it cost 100 times more to produce one kilowatt of energy from solar power than it does today. And while costs will continue to fall, favorable rebates and tax incentives are set to expire soon, meaning today may be your chance to get the best deal on solar panels for your home. New home solar loans make it easy to finance the cost of a home solar system just like your mortgage, except no money down required. For millions of homes across California and the rest of the country, solar electricity is now cheaper than they currently pay their utility companies for dirty, outdated fuel sources.