A recent greentechmedia article brought up some very good points about the cost of residential solar panel installation, trying to answer the age-old question: when the heck is solar going to get cheaper?

It’s a tough question, it turns out. Chalk it up to the vagaries of the market.  When it comes to pricing a home system, there are a lot of moving parts to consider, say installers – labor, raw materials, land, credit, shipping, etc.

Raw materials are currently continuing their trend of getting cheaper, after the brief silicon shortage. And new technologies–like thin-film solar–might be excitingly cheap to produce, but we still don’t have anything on the market that is both cheap to produce and as efficient as current technology. Cheaper panels don’t mean much if you need more of them.

Another big factor is the financial incentives offered by federal, state, and municipal governments (often through the aegis of electric utilities). These incentives can allow a homeowner to install a $40,000 solar panel system for maybe $12,000 or $15,000–eminently easier to afford and to finance, and making the ROI on such a system go from unappealing to very, very attractive.

People often think that by waiting to install solar, they will be able to take advantage of cheaper materials and better incentives combining to mean cheaper photovoltaics systems. It’s hard to get across the message that this isn’t the case. Yes, there’s always a chance that some crazy new technology will burst on to the scene, be thoroughly and quickly tested, be manufactured to scale in no time at all, and be so easy to install that contractors won’t need special training and will immediately offer it above standard panels. There is also always the chance that you really have won the Millionaire’s Sweepstakes. Waiting two years to go solar means, most likely, that you are just losing two years of savings on your electric bills. The true cost of the system may be slightly lower, but in states that already have a history of offering incentives, those incentives may be scaled back in order to compensate for dropping prices. We’ve already seen this happen in California, where the incentives were put in place with a scale-back scheme, and in states like Connecticut and New York, which have both cut or scaled back their incentives in response to increased federal incentives.

Which leads us to the scenario in which it probably does make sense to wait on solar: you have a moderate electric bill (say, less than $150/month), and you live in a state that offers few or no incentives to adopt solar, meaning you would be responsible for financing the total cost of a system, minus the nation-wide federal investment tax credit equal to 30% of total system costs. Read up on the types of incentives and what they mean to the affordability of solar here. Considering the increasing popularity of solar and the strong support it’s receiving from the Obama administration, it seems reasonable to expect that more states will adopt solar incentives as time goes on. 

So, in short: you’re interested in solar, you have an electric bill that needs reduction past what conservation measures you can adopt, and you live in a state that offers some financial incentives. Does this sound like you? Then fill out our informational web form and let us help you towards getting solar today.