Solar Costs Continue to Decrease

Renewable energy prices have fallen over the last 20 years. And, especially noted is the price change of solar energy panel creation and distribution. Over the last decade, the price of installations has declined 70 percent.

You may be wondering how that is possible, and what will become of the economy of the future solar market? Solar costs have drastically reduced during the last 20 years. Over the first wave of the renewable energy revolution, 1998-2009, installations fell by about 30 percent.

In the previous ten years, we have seen an astonishing 70 percent price reduction. In today's market, creating a new utility-scale solar plant is notably less costly than creating a new fossil fuel-burning power plant of equal measure.

Cost Reduction Factors

New photovoltaic (PV)technology and panel design are game changers. Modern manufacturing techniques have been a significant motivation for the decline in prices. The last 20 years have given us massive efficiencies in all sectors of industry, whereas the supply side prices have greatly diminished.

These modifications allow companies during development to save money and pass those savings on in the form of lower costs. Drops in production expenses have led to economical panels. China, in particular, has made massive investments into all sectors of the clean energy industry over the past 20 years.

Chinese panel producers gain in many ways from ample government grants, but also labor costs are held at a meager rate. In fact, the average wage in China is approximately $3.60 per hour.

This rate compared to the average hourly wage in the U.S. of roughly $21 per hour, we can see being part of a global market has its advantages. Cheaper means of production, including those of labor, is indicative of the steadily diminishing global solar costs.

Government Subsidies

The United States and other parts of the world have initiated many government-funded financial relief systems for panel users and developers. In 2011, the Solar Energy Technologies Office (SETO) at the U.S. Department of Energy began the SunShot Initiative, an endeavor intended toward making clean energy competitive with traditional electricity sources, without subsidies, by 2020.

To that end, SETO worked to streamline permitting processes, co-operated with associates in production and research labs, and flowed millions into upgrading cell technology and construction methods. Federal, state, and local financial incentives like the US federal government’s clean energy investment tax credit (ITC) can help homeowners to claim a tax credit equal to 30 percent of their solar power arrangement.

Therefore, a $20,000 system would pass to you a $6,000 tax credit. If all indications remain, we should expect to see continued price drops. Despite current trade disruptions, the global economies are continually promoting renewable energies, and solar is one of the most easily individually accessible means of trending our societies toward an ecologically sustainable future.

According to PowerScout, a Californian solar startup, the price of solar will continue to fall 4.4 percent each year through 2022. But if you’re interested in going solar, don’t wait; the clean energy investment tax credit currently at 30 percent is set to decline to 26 percent in 2020, then 22 percent in 2021.

After that, unless Congress approves an extension, the tax credit will be eliminated entirely for residential solar installations in 2022. If you want to move into the future and join the solar revolution, or if you want to find out what solar panels are right for you, go to HahaSmart.com and try our price checker tool.

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