When to go Solar: Studying the Industry
Solar costs have been dropping over recent years due to some exciting advancements in solar technology. This means solar homeowners can save more now than they ever have before. Solar has always paid for itself but it raises the question: should we go solar now, or wait for prices to drop more? When is the best time to ensure that solar panels pay for themselves? To answer these questions, and dispel some solar myths, we have to look at recent trends in the solar industry, and then consider the nature of the solar investment.
In the US, monocrystalline modules have brought down costs from $3.50 per peak watt in 2006 to $0.40 per peak watt in 2019. According to top solar market analyst Jenny Chase, “it looks like the learning rate for every doubling of cumulative manufactured crystalline silicon is more like 28% [rather] than the previously estimated 26%. CleanTechnica
At the same time, we have seen incentives begin to wane over the last few years. Local utilities have been reducing solar payback, and the federal solar tax credit is set to phase out by 2022. This fact, coupled with an 89% drop in solar photovoltaic module prices since 2010, means customers will be able to take advantage of a sweet spot by choosing to go solar now. The Solar Nerd. Solar panels will likely always pay for themselves, but we do not know what these incentives will look like down the line.
Optimal Balance of Costs and Benefits is Now
Utilities across the U.S. have chosen to lower their solar payback in recent years, creating a forecasted decrease in return on the solar investment. In addition, the Federal ITC, or solar investment tax credit, has not been renewed and will drop from 22% to 0% in 2022. So what is the key to the timeliness of this investment? The inevitability of your electric bills. Each year, homeowners miss out on the electricity savings from the previous year, because the electric bill does not go away. If that’s not enough, electricity prices go up every few years, meaning the missed opportunity for savings just gets larger and larger. This is the primary factor that makes solar energy viable in the first place.
As new solar technologies are developed, it can be tempting to wait for even more added efficiency. When we look at new, unproven technologies though, it can be hard not to just go with the proven technology with guaranteed payback now. Again, there are so many savings to be had now, that there is actually quite an opportunity cost of speculating about what might come out soon. Additionally, these established technologies are far more efficient than many people realize now, as we have discussed. Furthermore, homeowners hoping to sell their home will see ever-increasing added value to their home from their systems, as well as increased home value. This of course requires that homeowners own their systems, and does not apply in the case of a solar lease. Solar energy viability is likely in the future but not guaranteed, and the truth is that there are massive savings sitting on the table right now.
All of these factors taken together create a sweet spot for solar right now, and every case is unique. When asking the question Rooftop Solar experts can help you navigate your decision today. Let’s take a look at exactly how much you will save by going solar today vs next year.