Last week, EnergySage released its fourth Solar Marketplace Intel Report™. In this report, you’ll find trends on 2016 solar pricing, equipment packages, and financing options, as well as new information about community solar and solar shopper demographics. Read on for some of the top takeaways relevant to today’s solar-interested homeowners.
Dramatically falling solar prices over the past three years mean now is the best time to shop for solar
Between the first and second half of 2016, the national average cost of a solar PV system fell by over six percent to $3.36/W – the biggest price drop measured in any EnergySage report. For an average 6 kilowatt (kW) home solar system, that’s equivalent to a $1,250 discount on the gross cost of installation.
The cost of solar varies from state to state, and in many cases state prices are even lower than the national average. For example, in the second half of 2016 the cost of solar in Arizona reached $2.97/W, the first time a state average price was under $3.00. In Virginia, average gross cost fell by a whopping 14 percent in 2016.
Gross cost per watt by state
|State||H1 2016||H2 2016||% Change|
These historically low prices mean that if you’ve been waiting to install a solar energy system on your property, now is the time to start comparing quotes. There are two main reasons why waiting even longer won’t save you more money:
- Financial incentives are reduced as solar installations increase. While there are significant rebates, tax credits and other incentives in place today to encourage homeowners to go solar, incentives programs usually get phased out as solar becomes more popular and costs decrease. Additionally, some state and local rebate programs, such as New York’s Megawatt Block Incentive Structure, decrease in value as more solar is installed. The longer you wait, the less likely it is that these incentive programs will be around.
- Every year you don’t go solar means thousands of dollars in missed savings. If you wait to go solar, you’re stuck paying your utility electricity bill every month. The typical U.S. home spends about $1,400 a year on electricity. If you buy a system that meets 100 percent of your electricity needs today, you eliminate your utility electricity costs and have an extra $1,400 in your pocket a year from now.
Your savings will continue to grow for the 25 to 35 years that your system is operational. For every year that you don’t buy solar, you lose out on all those electricity bill savings!
Don’t be afraid of buying a larger solar PV system: bigger installations bring economies of scale
Solar is a significant investment – in 2017, an average 6 kW solar PV system cost approximately $14,000 after tax incentives. However, solar panels also offer major long-term financial benefits – on average, homeowners who use EnergySage break even on their investment in just seven and a half years, and their systems continue to generate electricity for another 20 years or more.
Most solar installers recommend that you install as big of a system as you can fit on your roof to maximize your 20-year savings. EnergySage’s analysis of solar prices by system size offers yet another reason to push for a larger system: as your solar panel installation gets bigger, the cost per watt pricing of your system will decrease. In short, home solar installations benefit from economies of scale. Systems under 5 kW cost 5.5% more per watt than systems in the 5-10 kW range, and the cost per watt continue to decrease as your system size increases. The cost per watt for a system that’s 15 kW or bigger will be nearly 11% lower than if you install a system that’s 5 kW or less. Bigger is better!
Getting more quotes means you’ll be more confident in your solar decision
At EnergySage, we always recommend reviewing quotes from multiple solar installers that include a variety of equipment options before you make your final purchasing decision. Comparing all of your options makes it easier to spot a good offer so you can find the best combination of price and quality for your home.
It also means that you’ll be more confident in your solar choice so that you can come to a final purchasing decision. EnergySage data backs this up: homeowners who compare just two quotes are three times more likely to go solar than shoppers who only receive a single solar quote. If you get five quotes or more, you’re nearly eight times more likely to follow through with a solar installation.