Blog
August 2nd, 2009

Going solar getting cheaper

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A lot of people are intrigued by the idea that they can reduce their reliance on their power utilities. There are plenty of options to get even partly off the grid — at our local state fair, one company is touting geothermal systems — but solar power, one of the most popular, is not exactly inexpensive.

The Federal government and the recession are teaming up to help that:

If you’re searching for a bright spot in a dismal economic climate, look no farther than your roof. The downturn is helping to make solar panels more affordable.

Manufacturers are cutting prices to move inventory. Uncle Sam is helping too. As part of the economic stimulus package, the federal government this year boosted tax credits to homeowners who switch to solar power. Together with state incentives, those subsidies could slash the cost of some systems in California by 50% or more. Some homeowners are banding together into buying groups for even bigger savings.

If you don’t have a lot of extra cash lying around, innovative financing can help you spread your payments out as long as 20 years. Or you can take advantage of leasing deals to get panels on your home for little or no money down.

The long and helpful article notes that many manufacturers of solar panels have cut prices:

Demand for solar-power systems in much of the world has slowed along with the global economy. Meanwhile, solar-cell factories planned when the market was booming are coming on line. The result: too many panels and too few buyers. To move them, companies are cutting module prices.

In the U.S., wholesale prices for top-quality modules made of crystalline silicon have fallen by 50% over the last year to around $2.40 a watt, according to Nathaniel Bullard, solar analyst with New Energy Finance in Alexandria, Va.

“It’s really a precipitous drop,” Bullard said. “The mood in the industry is grim.”

Panels typically account for less than half of the final “retail” price most consumers pay for solar. Unless you’re a do-it-yourselfer, you’ll need to hire a professional installer whose add-ons will include labor, permits, taxes and an inverter to convert the direct current electricity generated by the solar array into alternating current suitable for appliances.

Retail prices haven’t fallen in lock step with panels, but there’s no question that they’re coming down fast. Some residential systems that were retailing for $9 a watt to $10 a watt installed before the recession can now be had for about $7.50 a watt. Homeowners who join together to buy in volume are snagging complete systems for a little more than $6 a watt. Big commercial buyers are paying even less.

And that’s before factoring in government subsidies.

Subidies for all manner of alternative energy installations abound. In addition to the Federal Investment Tax Credit, many states offer rebates toward the purchase of solar systems. You’ll want to check out the DSIRE website (Database of State Incentives for Renewables & Efficiency) for more on that. There’s more useful info at the Solar Energy Industries Association (SEIA) site, too. Even California municipal utilities have got into the act.

Not all homes, obviously, will do, but there’s a wealth of info on the web — including solar energy calculators — to help you determine whether it’s right for you.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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