Despite its growing market, the solar panel industry experienced its first price increase since 2010, leaving consumers to wonder if this is an indication of things to come. The prices of photovoltaic modules have fallen significantly over the past several years. The cost to install both commercial and residential solar power systems in 2011 declined 11 to 14 percent from the year prior – and then fell another 3 to 7 percent in the first half of 2012, reports the Department of Energy’s Lawrence Berkeley National Laboratory. But as any savvy businessperson knows, this unsustainable trend could not continue if solar power is to stay afloat.
An analyst alert by GreenTechMedia reveals that the prices of PV panels slowly escalated at the beginning of 2013. Although this 3-to-5-percent increase has raised a few eyebrows, quarterly projections still anticipate a price decline across the solar panel spectrum.
Near Zero conducted a survey of more than 20 industry experts to discuss the pricing forecasts for PV modules. The experts concluded in December of 2012 that prices would continue to fall – but that this would require maintaining and increasing the money spent on research and development. Therefore, with the appropriate funding, solar module prices could drop from an average of $2 per watt in 2010 to $.75 per watt in 2020, while the amount of installed solar power could increase 10 times its current rate. If panel prices hold steady instead of dropping, the Near Zero panel predicts that this tenfold solar expansion could cost 50% more, totaling several hundred billion dollars.
Experts believe the recent price hike was influenced by an increase in demand from Chinese and Japanese consumers, along with a reduction in PV inventory as manufacturers hurried to sell off excess products at the end of their fiscal year. Anti-dumping tariffs, or penalties the government can impose on suspiciously low-priced imports to thwart unfair competition, are also likely to blame for higher panel prices.
But, it’s too early to tell how the pricing trends will continue throughout 2013. Chinese manufacturers were able to avoid the anti-dumping tariffs last year by purchasing cells from Taiwan. As Europe also faces anti-dumping tariffs, its increasing solar demand can no longer be satiated by the Taiwanese market. If the tariffs are successfully levied on essential components of the PV panels – polysilicon in China, and cells and modules in Europe – there is a good chance that consumers worldwide will feel the impact.
Instead of creating market uncertainty and deterring consumers from investing in solar power, industry enthusiasts feel the modest price hike suggests that it’s time to make a move. Considering the projected population growth and movement toward warmer climates (with greater cooling needs), the demand for both residential and commercial electricity will increase 46% by 2035, reports the U.S. Energy Information Administration. As the projected cost for electricity skyrockets and local solar power rebates and incentive programs approach expiration, current solar conditions make it an ideal time to invest in solar energy.