Will solar panel prices decline in 2023? | DroneQuote

Will solar panel prices decrease this year? Many homeowners would like to know because the current cost of solar panels can turn them away, especially those wondering if it’s worth the investment. In this article, we will explore the current cost of solar panels, the factors affecting solar panel costs, how solar panel prices have changed over time, and whether we expect prices to drop this 2023. 

The current solar panel price

Solar panels are becoming increasingly popular as more people look for ways to reduce their energy bills. However, the current solar panel price can be daunting for many people. The national average cost of a residential solar panel system in 2022 is $2.94 per watt, while the average solar installation price is between $16,000 and $21,000. This cost can vary greatly depending on the size of the system, the type of solar panel, and other factors. 

Still, there are ways to reduce the cost, such as taking advantage of government incentives like the Inflation Reduction Act. There are also financing options available that greatly help to ease payment. 

Why is solar expensive?

An article published by National Geographic describes “converting light into electricity with no moving parts is a profoundly different enterprise than turning a turbine to make power.” Converting energy from the sun requires more time and technological advancements than other renewable energies. Additionally, the type of material used in the solar panels directly impacts the cost. Silicon makes up most solar cells. Silicon is a semiconductor material that requires significant amounts of energy to purify, which is why solar panels are generally expensive. The two common types are monocrystalline solar panels, which are more expensive, and polycrystalline solar panels, which are cheaper. 

Besides the material used in making solar panels, other factors contribute to the overall cost of a solar panel system. The cost of labor, installation, inverters, location, and system size directly impacts solar price. The general rule is the larger the system, the more costly it will be. DroneQuote has discussed why solar panels are expensive in this video. 

How solar panel prices have changed over time 

Based from NREL’s documentation, solar panel prices have decreased dramatically since 2013. 

Similarly, prices have dropped more than 70 percent in the past several years, with the average upfront cost for a 6 kW system landing between $15,400 to $38,000. Lastly, SEIA estimates that installing solar photovoltaics has plummeted 45% over the past five years, with the average system price dropping from around $5.50 per watt in 2015 to around $3.00 per watt in 2020. This is a significant decrease and shows the advancements in technology and the increase in the production of solar panels over the past decade.

Will solar panel prices drop this 2023?

As projected by different solar experts, global solar panel prices will decrease this 2023 primarily because the component or material costs used to make panels are declining, thus reducing solar panel prices.

Since the cost of materials, namely the polysilicon and wafer, plummeted, solar manufacturers are ramping up production. At the end of 2022, several new polysilicon factories came online, and costs for the material have dropped by more than a third since mid-November. 

What are polysilicon and wafer?

Raw polycrystalline silicone

Wafers are ultra-thin polysilicon squares pieced together to make panels. This January, wafer costs fell as much as 21%. Meanwhile, according to China Silicon Industry Association, polysilicon costs plunged to as low as $21.10/kilogram this January from last year’s $45.11/kilogram. With these developments, the surge of cheaper solar panels will help countries reduce their dependence on fossil fuels and potentially lower electricity prices. 

Supporting the claim that solar panel prices are to decline in 2023, GlobalData’s report “Rooftop Solar Photovoltaic Market 2021- Global Market Size, Market Share, Key Trends and Key Country Analysis to 2030” reveals the downward trend in rooftop solar prices from 2013 to 2020 comes from the increased supply of solar cells and modules. However, solar PV system prices increased significantly in 2021 due to logistical constraints caused by the COVID-19 pandemic. Delivery delays and a lack of workforce create major obstacles in the value chain. But the GlobalData said the solar PV system will gradually decline between 2023 and 2030 due to technological advances, component reductions, and increased production scale. 

Will the installation cost decline too? 

Despite the decrease in solar panel prices, experts anticipate that solar installation prices will not decline in 2023 as other costs like labor, inverters, and equipment will not decrease. However, you can take advantage of the solar tax credit and other solar incentives to lessen solar costs and make it accessible for everyone. 

If you have questions on home much it will cost to install solar panels in your home, contact DroneQuote. We have a solid track record of acting as trustworthy agents to serve our clients in the best way possible. If you want to save money by going solar, DroneQuote can assist you. Our services come with multiple quotes so you can analyze your options and determine how much money you can save. Get started now by simply clicking here.