Why Have Solar Installed Now?


The big recent industry trend has been a steep decline in price. From the time that PV was first used for residential electric generation in the 1970s, the price of PV has slowly, steadily and substantially dropped over the years. During the recent recession, the steady decline became a rapid plunge, through 2012, and then mostly leveled out.

The main cause of the recent decline was a big drop in solar module prices. During the years just before the financial crisis, there had been a very dramatic increase in investment in solar module production facilities. Many new factories were built, existing ones were expanded, and production equipment was updated. Meanwhile, large sums were invested in research and development, to make solar modules more efficient, and especially to find ways to make production less expensive, while raising quality. So, by the time of the big crash, the level of production was high, and continuing to grow with investment funds already committed, while the cost of production had fallen. Then the crash caused a dramatic drop in demand. High and increasingly inexpensive supply met plummeting demand, and solar module prices fell. During one 8 month period in the midst of this, I noticed that the prices at which I could buy some popular modules had fallen by about 40%! As the recession went on, new investment in solar production shrank back down, and a number of makers were shaken out of the market. Then, as recovery became more certain, demand started to pick up. These factors have now caused PV retail prices to more or less level out, but at a much lower price than before the recession.

Meanwhile, there is now a federal income tax credit available that covers 30% of the cost of the PV installation. This will remain in place through 2015.

The net result is that solar electric generation is now much more cost effective than before. A large majority of homeowners would now save money in the medium run by changing to solar, and those with high monthly bills would start saving substantial money in a very short period. For many people, installing solar has now become one of the most profitable investments they can make,

and one with the lowest risk.

High return  +  negligible risk  =  wise investment.