Solar Power Is Set To Get More Expensive

The sun constantly bathes half the planet with energy. The energy may be free, but the methods for converting it to electricity cost money. Last year, the Chinese government cut subsidies to their solar panel manufacturers to shrink the industry which was perceived as bloated. This forced Chinese solar panel makers to cut prices to clear inventory. This drove down prices about 30%, making solar power cheaper than ever.

Reuters is reporting that Eric Luo, president of one of the largest solar panel makers in China, predicts that “the party is definitely over.” Speaking at the World Economic Forum, Luo said that prices have quit dropping and he expected industry consolidation to cause prices to rise by as much as 15% over the next two years.

According to Reuters, China has about a third of the entire world’s installed solar capacity and they dominate the industry. Of course, the Chinese have been accused of dumping panels by both the European Union (which has recently dropped tariffs) and the United States (which is still imposing an anti-dumping tariff).

We are more likely to have opinions about the technology behind solar than the economics. But if you were thinking about buying panels, you might want to make it soon. Then again, price increases could be offset by improvements in efficiency, but it seems unlikely that efficiency will grow that fast in the next two years.

We think of using solar panels on the roof, but you could also build a bike. Of course, you might be able to save a little money if you build your own panels from raw solar cells. Or, perhaps not.

51 thoughts on “Solar Power Is Set To Get More Expensive

      1. Perhaps you don’t. It’s better to spend more locally because that money comes back to you. Money you send to China doesn’t, because they aren’t buying enough stuff back.

        Same reason why the British went to war with China over tea. Eventually you run out of money to pay them, at which point they can start to make more and more demands, at which point you have two choices: WW3 or Chinese world hegemony.

    1. So you wrote that on your Chinese made computer or Chinese made phone while sitting at your Chinese made desk that you got to by driving your car with Chinese made parts. What exactly are you talking about?

      1. what are you talking about? not everything is made in china and it is entirely possible to buy products that have no components that come from china if you are willing to pay for it.

        1. Find one x86 compatible PC or phone that is proven completely China-free. Just one.
          That also applies to all the necessary accessories to use thing (charger for the phone, monitor, keyboard and mouse for PC)

  1. PVinsights shows poly, cell & module prices still falling, albeit slowly now. With module prices at ~20c/W vs ~10c/W for cells, there’s plenty of room for manufacturing efficiencies to push module prices lower even if cells hold at 10c or even go up. Most of the industry has yet to switch to PERC & black silicon, which will help hold cell prices down. More automated module lines switching to shingled cells will also help cut costs on a per-watt basis. Singled modules will also improve yield, since the cells are cut into slices and a defective spot means only one slice discarded instead of the whole cell. Within a couple years I expect 400W modules selling for <18c/W will be normal. Even if the price/W holds, standard module capacity going from 330W to 400W will save labor and materials. A basic 6kW rooftop system will need 15 panels instead of 18.

  2. One thing noone talks about is the ever looming boom in sales. Solar is a long term investment, and with prices that has been falling dramatically, consistently, for decades, it simply makes more sense to wait. Let’s say the price falls at 20 percent, unless your investment pays for itself in 4 years. When prices start to fall at 10 percent, you investment only needs to repay itself in 6 years to make the initial capital investment outperform the drop in pricing.

    1. So when prices show signs of leveling off, all the “Wait it’s still falling” people will stop waiting pull the trigger on an installation?

      I disagree that it ever made sense to wait. As long as the payoff period was shorter than the lifespan of the equipment, it made sense to jump in as soon as that happened. It’s like sticking with incandescent bulbs even after CFLs came out while waiting for LEDs — no, you still would’ve saved money if you’d switched immediately. And when those finally die, just switch to whatever’s currently on the market.

      But there are surely people thinking like that anyway. The question is, how many of them? And how many are really serious about going ahead with it now that their fallacious logic has told them that now is the time?

      1. Nah. There is more that plays into the buy or not question. For instance, how long are you going to stay in your house? How low will the price of utility provided gas and electricity go? How will the efficiency of the panels change over time? How much will maintenance of the panels and grid-tie system cost?

        You could just let others buy them and pay the up front costs while you enjoy lower gas prices because of the glut they cause. (same thing will happen for gas and diesel cars and trucks, BTW)

  3. I’ve had panels installed since 2007. IN that time frame the panels have had a good return on my investment. It helped that I had local power company incentives and the power company still pays a reasonable amount for the solar I do generate. The system has already paid for itself and now it’s paying me dividends each month in the form of lower electric bills. For me I was happy I got the system when I did. Yes you can wait a bit longer but then you risk missing some incentive programs and or tax breaks. I’d go for it if it makes economic sense for you. In my case it certainly did but only because the local power company had a very attractive incentive program. Not all locations are like that.

  4. In 1999 It cost me $60 for a 20 watt solar panel. (this is just a sample.)
    Today it cost around $80 for a 20 watt Panel.
    I have never had money to play with. Only at most I may be able to get together $100 and at most $200 at a time.
    So as far as being able to go out and get a proper Solar panel system that is out of the question.

    Over all the years I’ve never seen the so called price drops like they have said..
    Yea there is getting some over the Internet but then you have to buy in some quantity to get any type of deal.
    I really don’t think that should count. But then I found that the shipping was a killer.
    But as far as getting any type of deal over the years. It’s a no go.
    And its never been a go as far as I can tell.

    1. Here in the Netherlands you can get a 275Wp panel (Canadian Solar) for about $140. I have no idea where you’re situated but in Europe panels have dropped in price tremendously over the last decade.

      1. I was just about to comment something similar. That’s for barely-branded Chinesium panels, though. To get the really good panels you pay about $250-300 a piece. Still, $1/Wp ain’t bad.

        1. $1/Wp is bad. You can expect 1 Wp to make 0.1 W actual, which is 0.9 kWh per year. For power prices at $0.11/kWh that is worth 9.9 cents, which means you have to run the thing for 10 years just to break even, assuming no maintenance costs. With maintenance at 3% annually, the payback becomes 15 years.

          And that’s at retain prices for a private customer. If a utility bought it, they’d never make ends meet. Of course, even the private owner incurs the distribution cost because they’re largely not using the power as it comes, instead using net metering to get it “back” from the grid, but the utility is forced to pay the difference to make the system profitable to the user. The utility then takes its own back by jacking up service and power prices.

    2. I’m not sure where you’re located but that doesn’t sound right. You can find panels on ebay all day much cheaper per watt than that. I see some panels in the 300w range on there for $150-$200 USD. The prices are a little wonky for the low wattage panels on some auctions though. I’ve found more than one where the 80w panels were more expensive than a 100w one. I’ve seen several for a 20w panel around $40 give or take. I don’t want to post links that will go outdated but you can search for all of these as of today’s date.
      The downside is that the large wattage panels all come freight.

  5. “We think of using solar panels on the roof, but you could also build a bike. ”

    And yet the story picture is closer to the ground.* With several, maybe running a McMansion.

    *Easier to damage/vandalize.

    1. *Easier to clean off snow/dust.
      *Easier to replace.

      I doubt a standard roof would be strong enough to handle the weight and wind loads of the number of panels in the story picture for a retro-fit.


      1. Speaking (writing) of the story picture…
        I guess the property owners felt the solar array in the foreground had a priority over the vegetable garden getting enough sunlight.

      2. My roofs (rooves?) are handling full coverage on the south facing side nicely, and I didn’t even use aluminum frames, because, cheap – I used 2×8 treated lumber rails, which create a nice convection path under the panels that help cool the place in summer. On a mobile home I use for an office, I have 9 275w panels with similar wood racks, but for that, since mobile homes (especially ones made for W VA in the ’60s) are flimsy, I had to make big triangles so the weight was squarely on the walls instead of somewhere in the middle of the roof. No big deal. These things don’t weigh that much these days (IMO the glass tends to be too thin…), snow load is a bigger problem, and you’d better pay attention to wind bracing for the “zipper effect” as well. This install has withstood hail the size of quarters and 70 mph microburst winds with no issues.
        The “real building” is a 2 story 1k sq foot “Storage shed” sold by home depot and put together by classic manor builders, it’s not even a “real” code compliant home. 2×6’s for roof rafters, 2×4 lower floor walls….t111 plywood sheathing is probably the strongest wood in it.

  6. In 1975 a study was done that determined if the cost of solar got below $5 a watt that it would be competitive. It’s a little bit lower than that now so I’m not too worried about the price of solar panels going up a bit.

  7. I have 3 sets of those Horror Fright 45 watt solar panels. (I got them On Sale) Not sure if they are really worth the effort to hook up and supplement the household power. I think of maybe using them on an off-grid shed at the farm…
    (But the farm is ~300 miles away and I only get there a couple of days/year.)

      1. If you go the optimistic route and say 100% efficiency for 12 hours a day for a year at 10 cents a kw/hr, it’d be $60 a year, which is probably about what he got each of them for (sale+coupon). Plus, he can move them to his farm!

    1. It’s fun and works if the power goes out. I have a 12V circuit for 12V loads such as LED lighting so I didn’t have to buy an inverter. Need to use low impedance wire to minimise voltage drop though.

  8. We’ve been off grid since 1984 with Solar electricity. Slowly at first, panels we bought from the decommissioned Carrizzo plains plant in California…ARCO panels…still working, btw, at 85% of specs. People are foolish for not installing panels and conserving energy…amazing strides. Batteries are still lagging, but some Trojan AGMs which we bought in 2005 still serve us at our home and our cottage.

  9. “Last year, the Chinese government cut subsidies to their solar panel manufacturers to shrink the industry which was perceived as bloated. This forced Chinese solar panel makers to cut prices to clear inventory.”

    I still can’t make sense of this. Did you leave out a step in the logic? Seems like if you reduce the subsidy to the panel makers, then they would be forced to charge more (in order to make up for the reduced income from the subsidy, and still remain profitable). What am I missing here?
    (Did they mean to say the panel makers chose to reduced prices so they could sell more panels before the subsidies expire; figuring they would make more on the subsidy than they would lose by the reduced price?)

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