Solar Panels Cost Background



Solar panels cost is the number one cost item for home solar power systems. As such it is important to understand the cost of solar panels basics.

Power Delivery is the Key

The net price tag of a turnkey home solar power system is comparable to the price of a full size family car. And comparable to the car’s horse power is the solar power system production capability measured in watts. The first thing you want to compare is the production rating of the panels in Watts. There are few facts worth knowing:

  1. Higher efficiency solar panels output more power per square feet (or square meter) than lower efficiency solar panels. However, if you have enough footage on your roof and you can get a better price per watt for a lower efficiency panels – go for the lower efficiency/cheaper per watt solar panels.
  2. Any solar panel in use (not in storage though) ages and will produce less electrical power. It is a common industry practice to guarantee a reduction in output power capability of no more than 10% after 10 years and no more than 20% after 25 years. This fact immediately tells you that buying used panels “cheap” might not always be the optimal solution
  3. Even though power delivery is the key, there are situations where real estate is significant. For example, a school, office or a public building that want to get the most power from a given roof area. This is the case in some European countries and in Israel, where the utility buys back solar power at premium feed-in tariffs. In these cases the building owner has an incentive to go for higher efficiency solar panels even if they are more expensive per watt

The food chain of solar panels cost

Solar panels manufacturing cost is driven by the cost of materials and by assembly and test cost. Not all manufacturers have the same quality reputation; there are a few that are known for better quality. The manufacturers sell through their distribution channels to wholesalers, solar contractors and to on line stores. As with other commodities, the price decreases with quantity, therefore there is an incentive for the buyer to buy higher quantities. The price to the end buyer, the homeowner obviously reflects the added margin of each party on the food chain and it is substantially more expensive than the production cost. Solar panels are heavy and bulky, therefore shipment and storage cost is considerable.

Comparison of Solar Panels

Compare apples to apples as much as possible compare the price of new solar panels from reliable manufacturers. Pay attention to warranty terms and guaranteed life span. Make sure the panels will withstand harsh climate conditions, dust, hail, temperature variation and humidity. Do not neglect the price of the solar inverter (a must component, it converts DC power to AC power). If your home is off grid, you will need deep cycle batteries and a charge controller.


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