Because the cost of solar has dropped significantly since they were introduced, some people are waiting to see if solar panel costs drop more before installing them. In this article, we will examine whether solar costs are likely to drop dramatically and if waiting to install solar panels makes sense.
Initially, solar panels were mainly for the wealthy. The solar panels were expensive to install and maintain and were not very efficient. However, the technology continued to improve and the manufacturing process got more efficient. As a result, by the 2010s, solar power became affordable for the average homeowner. They have continued to decline in price over the last decade, though those declines have started to taper.
Compare Solar Power Costs
To compare the costs of solar systems, you need to look at how many dollars the system costs for each watt of generating power. Before 2000, systems cost around $11 per watt. By 2010, the cost declined to $6 a watt. Now, a solar system should cost you between $2 and $3 a watt, depending on the size of the system and how many components like inverters you need to install the system.
However, comparing early costs with today’s costs is not an apples-to-apples comparison. As solar’s popularity grew, the federal government began to offer a tax credit for the installation of solar systems. These systems effectively reduce the price you pay by 26% for 2022. Therefore, the actual price for a modern system should be under $2 per watt for most systems.
It is unlikely that the cost of solar power is going to decrease enough to make up for the federal tax credit if it goes away. While the costs of panels may continue to decrease slowly, costs of electrical components and costs of installation are not going to decrease and may even increase.
Save Money On Your Electric Bills
In addition, once you have a solar system, you start to save money on your electricity bills. The savings over time contribute to the total cost of the system. If you invest in solar earlier, you begin to save money earlier. Given the rising costs of energy this year, those savings could be very significant. As a result, we feel confident telling our customers that even if the cost of solar panels continues to decline, purchasing solar now is still a wise economic decision. For most customers, a solar system scaled to their home size and financed for years will still result in lower costs per month.