The Reason Solar Is So Expensive In The USA

The cost of solar panels has dropped in the United States in the past five years. With the cost of solar panels dropping below $3per Watt for residential solar power, reaching a very important milestone in the solar panel industry. But, the cost of solar panels is still much higher in the USA than it is in other countries, mainly Australia. Just how much lower are the costs of solar panels in Australia than they are in the United States and is it possible to cut down some of the costs of solar panels?

Cost of solar panels in the USA

The United States has seen the cost of solar panels drop from 3.86 per Watt to under $3 per Watt Since the end of 2014. Residential solar power in the last five years is expected for an average 6-kilowatt (kW) solar powered system that has dropped in the cost of solar panels by over $5,000. This decrease in costs of solar panels is even more defined than it was in the early 2000s when the cost of solar panes was higher than $7 per Watt for residential solar power.

The cost of solar information that you will receive with be the gross solar panel installation cost of solar. There are federal, state and utility incentives. Meaning that the solar panel installations net cost of solar will be even lower before you account for the savings from reducing or eliminating your electric bill.

An example, a 6 kW solar powered system with a $3 per Watt gross cost of solar would only cost $12,600 after applying for the federal investment tax credit, which is for an effective net cost of only $2.10 per Watt. Most solar powered systems companies calculate the gross cost of solar panels on a per Watt instead of the net cost of solar per Watt in order to provide a policy-neutral look at how the cost of solar panels has changed over time. More recently, Tesla created a significant amount of media attention and consumer buzz by announcing a $2 per Watt pricing. The net cost of solar panels will include the federal tax credit.

Cost Of Solar Panels in Australia

When people discuss the lower costs of solar panels in other countries, they are most likely referring to Australia. The Energy Supply Association of Australia, as of 2016, the median cost of solar for a 5 kW system in Australia was 1.33 per Watt. At that time, Australia had already had a higher adoption rate of solar panels than any other country in the world, over 15 percent of households will be having solar powered systems.

Ever since 2016, the cost of solar panels has increased as well as the price of solar panel installation. Residential solar power in Australia and priced around $1 per Watt, which means that a solar panel installation in Australia is going to significantly lower than the cost of solar panels in the USA on a gross cost per Watt basis.

Can the USA Learn Anything From Australia?

Two of the biggest ways in which Australia has reduced its overall cost of solar panels is by easing both the permitting and inspection process for homeowners who want to add a solar panel installation to their home. The aspects of a solar panel installation require time and money. Quite frankly, the ‘soft costs’ of solar panels or non-component costs can add up to $1 per Watt to every solar panel installation, or $6,000 for an average 6 kW solar powered system.  

Australia has lowered its soft costs by making its permitting requirements for the solar panel installation simpler, and also by hiring dedicated solar panels inspectors. The USA solar panels permitting requirements that vary by state and local jurisdiction, but it also may include a whole lot of paperwork that is the installer of the solar panels is going to fill out. Australia has found a way to ease the requirements and restrictions, including offering nearly-immediate virtual permitting portals for the installation of solar panels. Las Vegas has followed Australia’s lead and they have cut their permitting times for solar panels from up to 90 days down to just a few minutes.

In addition, where all solar panel installation inspections are performed by building inspectors in the USA, in certain parts of Australia, the government hired dedicated solar powered system inspectors whose tole in to inspect all of the solar powered systems in a certain geographical area once a quarter or once a year.

Is It Worth It To Mimic Australia’s Solar Panels Industry

In more recent times, problems that have come with a solar panel installation in Australia have begun to surface. In recent studies, consumers who anticipated 20 years if production and the savings from their solar powered system have seen their solar panels equipment experience malfunction, break or reduce production greatly after only 5 years. The original solar powered systems that are on a homes solar panel installation in the United States are still operating smoothly after 20 years, so why isn’t the same thing happening in Australia.

It appears that the lack of regulatory oversight has allowed for the cheap solar panel installation of sub-standard solar powered systems, from the solar panels equipment and components that are used in a solar panel installation the actual physical aspect of solar panel installation. The same policy and market forces that have helped deliver inexpensive solar to Australian solar panel installation. These policies have reduced the time to solar panel installation, they’ve also lowered the opportunity to catch any errors in the solar panel installation or the issues with the solar panels equipment.

While there are a lot of new techniques in the American solar panels industry can explore, such as finding ways to reduce to the time that is required during the permitting process of the solar panel installation, as well as reducing the cost of solar panels by hiring dedicated solar panel installation inspection. There’s a balance which is struck to ensure that USA solar panel installation to maintain a high quality and continue to produce electricity for decades to come.