Solar Panel Pricing Outlook

For consumers seeking to save energy dollars by installing a solar energy system in their homes, prices in the solar market are ‘sunny side up.’ Costs have fallen in the solar market for both raw materials and the finished product.

Probably the greatest challenge facing the consumer is financing. Restricted lending practices have hurt sales due to the fact the budgets of most consumers are unable to afford solar systems including solar inverter without obtaining outside financing.

Investors are challenged as well. Due to the tight credit and the fear of a continued recession, various stocks in the solar market have taken upwards of a 50% hit over the past year for the prominent companies, and 60% for solar companies offering less dominant stock. New opportunities may be dawning, however, as indicators seem to point to loosening credit restrictions for solar projects as global governments seek to stimulate the industry.

Supply and demand plays a large part in the solar market. A seasonal dip in sales serves to create a stockpile of panels, which then help to lower prices for consumers. In addition, technology is rapidly changing regarding the manufacturing of newer forms of solar panels; forcing retailers to accept reduced profit margins in an effort to find consumers willing to purchase the discontinued models. This serves to offer consumers on a tight budget a greater selection of products like a solar inverter.

Reduced prices also have an effect on a company’s ability to compete and stay in business. When prices are drastically cut to attract consumers, larger companies with decent financial stability stand a better chance of weathering the downturn than do smaller companies just entering the solar market. Thus, large established German companies have less to fear than do younger Chinese companies.

Currently large European banks are beginning to fund the installation of both rooftop and ground installations in Germany, Europe’s largest solar market. Expectations seem to indicate the rest of Europe will begin to follow suit in the months to come, due to the lifting of restrictions on investment capital. Those seeking to invest in the current solar market would do well to look for companies with connections in Germany’s market especially those who manufacture solar inverter.

In the United States, Congress has offered incentives to encourage Americans in upgrading to solar. Buyers are offered a 30% refund on their federal tax return on the new installation’s value. State incentives may also apply. As an example of how this can benefit the buyer - for each $100 spent on a solar system in North Carolina, the final cost will only be $35 (30% federal refund - $30 + 35% state credit - $35). There is presently no cap on the federal incentives and only one stipulation; in order to qualify, the project must be completed before 2017. Congress has set aside $6 billion to guarantee loans in order to encourage banks to offer loans to consumers to finance renewable projects.

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