Solar energy prices are notoriously difficult to predict and, since becoming widely available on the market in the 1970s, some of those variances have been huge. Shortly after the energy crisis of the 1970s, the prices for this type of energy skyrocketed while during the 1980s the prices remained relatively stable.
Similarly, in the 1990s the prices saw dramatic fluctuations, often over as short a period as three months. Overall, the price of solar energy and solar energy equipment has seen a slow, but steady fall over the past few decades.
Nowadays, solar energy prices seem to be plummeting faster than ever. The new trend is so strong that even the most experienced traders were stunned. In a nutshell, the cost of solar panels, one of the main components of a solar energy system, has fallen by up to 70 percent in some markets. In fact, the prices for solar energy are so low that even liquefied natural gas is now more expensive — whereas it had previously been the cheapest go-to for the energy market.
Solar energy is quickly eating away the profits of natural gas and oil companies. But while these companies continue to compete more and more with solar, everyday consumers cheerfully welcome the resulting reduction in prices. More and more homeowners can afford to install solar panels, reducing their energy costs and environmental footprint through solar services and vendors like Bob Heinmiller Solar.
What’s more, the current trend is only expected to continue, especially because Asian markets show a clear preference for these products, which will only be reflected in the development and marketing of future solar solutions.
What lies behind this astonishing price reduction in the solar energy?
First things first, there is a definition issue that needs to be dealt with right from the beginning: solar energy is a technology, while fossil fuel extraction refers to simple quantitative mining of a limited, non-renewable natural resource. This is significant because a technology, although extremely expensive when first launched, only becomes more accessible and affordable over time.
For instance, the first mobile phones available on the market were reserved only for the super rich, but 20 years on, even the most poverty-stricken countries have millions of users. Fossil fuels, on the other hand, will only become more expensive as more is extracted.
After 30 years of development and constant technological improvements, solar energy has reached the “cost efficiency” level, resulting in affordable and effective solutions, even for the individual homeowner.
Another reason for these stunning price reductions is the green aspect of this technology. Let’s face it, the environmental aspect has a great effect on prices. For the past 20 years, numerous environmental campaigns have promoted solar energy as a clean alternative and people start to catch on this trend. The result is simple: more and more people want to have this new technology installed in their home.
This leads more companies invest in this technology, explore cheaper ways to manufacture solar cell panels, automate the manufacturing process and further reduce costs.
Lastly, during the last ten years, the solar energy market has grown exponentially. This means that there are more solar energy engineers, technicians, and contractors, further reducing installing and maintenance costs, while promoting the technology on a local, personal level.
So what does the future hold for this industry? Almost all experts agree that prices will continue their downward trend but will stabilize in the next decade, when solar energy will have a larger chunk of the energy market. Together with the battery market, it is expected that solar energy will make up more than 20% of all the energy market in the United States by 2025.