The cost of a solar energy system is approximately 100 times cheaper today than it was in the 1970s, and this trend of decreasing costs shows no sign of slowing. Each year, it’s becoming more affordable to install solar panels. In fact, in 2016, solar officially became cheaper than traditional, carbon-based fuel sources in several countries.
Here are the main factors that are driving solar power costs down:
Cheaper, more efficient components
The cost of the materials used to build solar panels and inverters has dropped significantly due to increased demand, a more efficient global supply chain, and improved resource allocation for development.
Lower soft costs
In addition to hardware costs, solar panel installation also includes a number of soft costs, including transportation, marketing, permitting, inspection, transportation, and financing. These soft costs typically represent more than 50 percent of the cost of a solar energy system. Fortunately, the soft costs associated with solar power systems have been falling as well, which is contributing to a lower overall cost.
Fossil fuel production has come under fire in recent years due to the negative environmental impact of carbon dioxide emissions. Solar panels are viewed as a feasible alternative energy source, so many legislators and organizations have worked make them more affordable and attainable through subsidization.
One example of this is the Solar Investment Tax Credit, which is offered by the federal government and provides a 30 percent credit to people who have a residential or commercial solar system installed.. This tax credit was recently extended out to 2021, though the amount decreases after 2019. In addition, some states also offer their own additional tax credits and incentives for those who choose to go solar.
Solar panels have become increasingly popular over time; more than one million U.S. homes are currently being powered by solar energy, a recent poll found that 9 out of 10 adults are in favor of expanding solar power use, and job growth in the solar industry is outpacing the national average for employment growth by 20 times. Increased awareness and willingness to invest from consumers has helped solar expand into new markets and provided more capital for solar tech development and improvement.