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Will solar panels become cheaper?

While solar energy used to only be accessible to people with massive budgets, it has become a practical, popular and relatively affordable renewable energy source.

Solar energy systems are well on their way to becoming mainstream across New Zealand households as more Kiwis choose to embrace the benefits of switching to solar. This is mainly due to increasing awareness of our carbon footprints and because solar power equipment has cheapened at a rapid pace over the past few decades. Many people are wondering whether the prices of solar panels and equipment will continue to drop; here are our insights on the current and future prices of solar.

How much has the cost of solar decreased?

The cost of solar panels has decreased by more than 80% in the past 20 years. Each year, it is becoming slightly cheaper to buy solar panels.

Here is what a solar energy system could cost your household in 2022.

Why has the price of solar panels decreased?

Increased demand

The global supply chain has become larger and more efficient in response to increased demand for solar panels. Demand has led to more companies producing panels, which has created a more competitive market and driven prices down.

Cheaper components and reduced production costs

Extensive R&D has facilitated the use of cheaper materials in solar panels.

Increased efficiency

As solar equipment has become more efficient, and the average lifespans of solar panels have lengthened, the cost of a solar energy system in the long term has decreased. You now need less panels for your desired energy output, and you need to replace them less frequently.

How much will the cost of solar decrease in future?

It is not likely that prices will continue to decrease at the same rate. If we look to other maturing technologies such as smartphones and cars, we see that after their tech ‘boom’, prices tend to stabilise. That said, the cost of solar will continue to trend downward – just at a less rapid pace; Bloomberg has predicted that the cost of solar will decrease by about 34% by 2030, which is still a sizable decrease!

What factors could make solar panel prices decrease in future?

Major technology advances

Developers are exploring the potential of perovskite,bi-facial panels, n-type products and higher capacity contact cells. Once technologies such as these become mass-produced, the price of traditional PV panels will likely be forced to drop in response to increased competition.

Comparative cost to relying on the national electricity grid

Electricity prices in New Zealand are rising. Even if the price of solar panels remained the same in the next few years, they would still become cheaper relative to the cost of grid power.

So, should you wait to install a solar energy system?

No. Currently, a solar energy system to support the average Kiwi household has a payback period of around 7-9 years and can deliver over $50,000 in utility bill savings over the 25+ year lifespan of the PV panels. Each month you go without solar is another electricity bill you pay unnecessarily. It is also worth noting that even at their current prices, solar energy systems can increase your property value.

If you would like to learn more about solar energy systems, get in touch with the Harrisons team. Our experts can further explain the costs of buying and installing solar panels. Get started today!
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