In Australia, the cost of solar panels and inverters has decreased over the past 15 years. For example, a 400-watt panel now costs roughly a third of what it did in the 1990s. However, some industry analysts believe that the largest supplier of solar panels, China, has increased business costs. This would put an end to the trend of falling prices.
It is suggested to buy a quality solar system now rather than waiting for prices to decrease even more because it will last longer and offer more advantages in the long run. On the other hand, avoiding inexpensive solar systems is also advised because they might not last as long and might not offer the required benefits.
To guarantee the finest solar system is bought and installed. It is advised to engage with a qualified local provider or installer.
Are solar systems getting cheaper each year?
A quality residential solar system in the current environment has a payback of around 3 to 5 years. At the same time, some of the cheap solar panel systems might have an even shorter payback of 2-3 years or for absolute crap. So, in a short to medium timeframe, the cheap stuff will break down and certainly return fewer funds than the better, longer-lasting quality systems. So if one seeks better environmental and financial outcomes – go for the quality.
Over the past 15 years in Australia, one rule did apply consistently. This was – solar panels and inverters were getting cheaper and cheaper. So in the early 1990s, a solar panel was $10 per watt, so you would have paid $750 for a 75-watt panel. Today a well-built 400Watt panel with more than five times the initial power capacity – will only cost you a third of the price. Then, it was around $250.
What does it all mean?
Cheaper, lower-quality residential panels can be found for less than $200, and I am sure there are industry experts who will claim that panel and inverter prices will reduce even further in years to come. However, I suspect we will have reached a plateau in a few years. I predict – the decade of ever-reducing solar panel and inverter prices has ended.
So I argue that while the power class of a panel might go up slightly. Say from 400 Watts to 440 Watts over the next few years. The price of good quality solar panels will not move down much further. For inverters, I believe we see a stable price point as well.
One of the critical reasons for this prediction is that many panels come from China. Even the ones from Korea and other places still have regularly Chinese-made wafers or cells embedded.
The times of cheaper and cheaper solar have come to an end
Since Covid, China has stopped selling more affordable and cheaper solar panels. This is because of the average costs of running a business. Such as health and safety costs, supply challenges, pensions, asset write-offs, and transport costs nowadays have to all be accounted for and have all added to price increase pressures.
So here at Your Energy Answers, tell customers who wait for solar to come down in price further. Do not wait for solar to drop significantly; we have entered a period of relative price stability. There is, of course, one exception. This is – for the Australian dollar to appreciate or drop significantly. Then you could see a sudden solar system price increase.
Advice on the cheap solar systems
One last warning: Do not go for the cheapest solar system price. Cheap solar panels are cheap for a reason, so the UV treatment of the backing sheet is less than ideal, the quality of the cells is compromised, the lamination time is reduced, or the frame is weaker. But, again, the solar panels are cheap for a reason.
If I learned something since my start in the solar industry in 2005, you would not get the 20-year life out of cheap solar panels or a 5-year lifespan out of a cheap inverter. Unfortunately, many hundreds of thousands of affordable dead solar systems on roofs do not generate power in Australia anymore.
If a good quality system is installed, you reap the benefits immediately for literally decades to come.