Solar panel prices have fallen dramatically over the last few decades, so investing in photovoltaic power has never been more affordable. Yet many homeowners and business owners continue to put off installing a photovoltaic system because they expect further cost reductions.
If you’ve made the decision to adopt solar energy, does it make financial sense to hold out a little longer, in hope of further price cuts?
Why Solar Panel Prices Have Dropped
Every new technology is expensive when it first hits the market. Over time, manufacturing processes are streamlined and raw materials become cheaper. And as supply increases, costs go down. This is the law of supply and demand.
Photovoltaic panel prices have followed this pattern across the decades. In the 1970s, the high cost of PV panels put them out of reach for most consumers. Fast-forward to the 1990s, and costs have dropped by nearly 85 percent. Today’s solar adopters pay about 60 percent less than those who installed photovoltaic systems in 2008.
These price drops occurred primarily due to new skyrocketing demand combined with technological developments in photovoltaic manufacturing and materials. This phenomenon, documented by The Economist in 2012, is known as Swanson’s Law.
Future Solar Panel Price Drops Will Be Modest
Solar industry experts do not expect massive cost reductions in photovoltaic panels over the next few years. While materials costs may come down slightly, huge price drops are a thing of the past. In fact, global solar panel costs have leveled out already.
Why is this? Aren’t new technologies for manufacturing photovoltaic panels still under development?
Yes, photovoltaic manufacturers will continue to chip away at the costs, but there’s only so much they can do to lower prices any further.
In fact, there’s potential for a slight increase in solar module import tariffs. And if more solar companies consolidate, demand for panels could outstrip supply. Consequently, PV module prices could possibly even go up a bit, at least temporarily.
Take Advantage of Today’s Low Solar Panel Prices
Install photovoltaic panels now, and you’ll be eligible for some incredibly lucrative financial incentives.
The federal solar investment tax credit (ITC) gives you back 30 percent of the cost of your photovoltaic system, in the form of an income tax liability reduction. Add in state and local rebates, grants, tax credits and solar renewable energy certificates (SRECs), and you could save thousands more.
However, state and local financial incentives are rapidly disappearing across the country. And the federal solar tax credit could be in jeopardy as well, under new administration policy changes.
Homeowners have until the end of 2019 to claim the full 30 percent. The amount steps down gradually after that, and is scheduled for elimination in 2022.
Although no plans have been announced for repealing the solar ITC, history tells us that it could happen. In 1986, President Ronald Reagan abolished the first federal tax incentive for photovoltaic installations.
If you hold off on investing in solar panels, you could miss out on these savings. The sooner you schedule your installation, the better chance you have of taking advantage of these cost-cutting opportunities.
Intermountain Wind & Solar offers a wide range of affordable photovoltaic system installation options for homeowners and business owners throughout Utah, Nevada, Colorado, Wyoming and Idaho. Contact us today to schedule a professional site evaluation, or to request solar panel price details.