The effect of current low Solar Panel prices

Solar panel prices have come down a lot in just the last few of years. It's not hard to get the average solar panel for less than $1 per watt. And because of the low cost, it's becoming a less major cost to a solar system - which means further reductions in the cost of the panels themselves will have less impact on the cost of a solar installation overall.

The cost of the associated electronics and installation will be between $1 and $5 per watt depending on how much of this installation you do yourself and how much energy the associated equipment needs to handle and what is done with it. And those prices should come down somewhat, but probably not at the dizzying rate that solar panels came down.

So let's take a look at the non-panel part of a solar system. Right now the inverters and controllers are not mass produced because we don't need so many of them. But because the price of solar panels has come down so much, the 'break even' time of a solar installation can easily be near a dozen years. And with 20 years of life on an installation, that is appealing enough that there are a lot more installations than there used to be making mass production of associated equipment more appealing. And consolidation is happening and the equipment is becoming standardized which means installation is simpler and thus will cost less.

But everything we've been talking about so far is with either a small battery backup or no battery. If one does not use a battery they can, in many places, connect to the grid and sell back electricity to the power company when their solar panels produce more energy than they are using. So there is no need for energy storage.

Having small installations of grid connected solar is well and good as long as there aren't too many of them. Because every grid connected system cumulatively adds to what the grid has to react to. If everyone gets a grid connected solar system the grid will not be able to handle it without an upgrade in equipment at the very least.

The straightforward way to solve this problem would be batteries that even out what is fed into the grid. But currently, batteries are expensive which makes non-grid-connected solar systems a rather small niche and grid connected battery systems less appealing. But we know that battery prices are getting better in little ways all the time and eventually it should add up to a system that people can use in a home or small business. And even if a majority of people don't buy a system like this, they will be able to reap the benefits of the advantages this kind of installation would provide.