Can Solar Panels Get Any Cheaper? Hell Yeah!
Panel prices have dropped 80% in 4 years – can they get any cheaper?
Should you wait for solar power systems to get cheaper before you buy?
This is a question I get asked a lot here at SolarQuotes:
“Hey Finn, I hear that the next solar advance is just around the corner, and panels are going to be much cheaper and much more efficient. Should I wait for that to happen? I don’t want obsolete technology on my roof…”
My answer is always the same. Yes, new technology is just around the corner. It always will be. And yes, solar panel prices will likely continue dropping, with few exceptions – however, subsidies can change as the major solar subsidy in Australia is based on market forces.
If you are always waiting, there will never be a time when you can actually buy. Imagine if you made that argument with computers 20 years ago. You would never have owned a computer because a better, cheaper one is always 3-6 months away.
At the end of the day, here’s the rub. The payback of your solar system doesn’t matter. The price you pay for solar compared to what it might cost next year doesn’t matter. If you want to buy solar purely from an economic point of view (and you have the cash or access to a form of solar finance at a reasonable interest rate (e.g. home equity) then the only question that matters is this:
If you are paying cash: Will your electricity savings/earnings from solar be worth more to you that the interest you would have got from keeping the cash in the bank?
If you have to borrow money: Will your electricity savings/earnings from solar be worth more to you than the repayments on the solar loan?
That’s all you need to work out.
If the answer is yes (and it often is), then from day one you will be better off in cash terms, compared to life without solar. Waiting to get solar will actually cost you money.
If the answer is no, then do the calculation again in 12 months as solar power systems may be cheaper by then – but don't forget about variations in the solar subsidy.
(If you want to do the calculation in 2 minutes, my solar calculator will do the trick)
