The prices of solar panels reduced drastically over the last decade (2010 – 2020). The average cost of a 4kW domestic solar PV system was around £20,000. However, you can install a 4kW domestic solar PV system at £4000 – £6000 in 2021. It is a 70% drop in solar PV prices compared to 2010.
Solar panels are becoming affordable than ever. As a result, it is becoming quite common among households in the UK. The cost of a single solar panel may vary between £350 – £400 However, as explained in the second half of this article, it can change depending on a number of factors.
What Caused Such a Decrease in Prices?
With the advancements in solar PV technology, solar panel production increased to meet the demand. The mega factories all over the world started producing solar panels. The price of silicon became cheaper because of the massive consumption. Through research, manufacturers could also increase the efficiency of solar panels. Increasing the efficiency means you can get a higher yield from a solar panel of the same size compared to a solar panel with lower efficiency. All these factors affected to reduce the cost of solar panels dramatically over the last ten years.
Factors Affecting the Cost of Solar Panels
• Solar Panel Technology
• Materials used
• Shipping Costs
Solar Panel Technology
Through innovations, manufacturers have found different methods to build better solar panels. For example, solar panels differ based on the connection of solar cells inside the solar panel. Half-cut solar panels are such a type of solar panel with two parallel strings of solar cells inside the solar panel. It divides the solar panel into two parts. Because of this division, one is independent of the other in power generation. It indicates that if one section of the solar panel is shaded, the overall solar panel’s power output is unaffected. Therefore, half-cut solar panels cost more than conventional solar panels with single-cell strings. Similarly, many other manufacturers use different technologies to improve power generation capabilities. They price the solar panels, taking the technology of the solar panel into account.
The price of solar panels can also vary based on the materials used to produce the solar panel. Mainly, there are two types of solar panels in the market.
• Monocrystalline solar panels
• Polycrystalline solar panels
Monocrystalline solar panels contain only pure silicon. But polycrystalline solar panels contain silicon with an added impurity. Because of this reason, there is a price difference between the two types of solar panels. The average cost of a polycrystalline solar panel is around £225 – £250. Monocrystalline solar panels cost between £350 – £450.
In 2015, the efficiency of solar panels was around 15% – 16%. This range is for polycrystalline solar panels. Manufacturers introduced monocrystalline solar panels with higher efficiencies (20%) in the beginning at higher prices. In 2021, there are solar panels with efficiencies as high as 45%. When the efficiency of the solar panel is high, the price is also equally high.
In 2015, polycrystalline solar panels were popular. The capacity of the polycrystalline solar panels was around 320W – 360W. All solar panels with a power higher than 360W were monocrystalline. With increasing efficiencies and novel technologies, you can find solar panels with over 600W of power. It is visible in most Chinese solar panel brands like Jinko and Trina. High-power solar panels mean higher generation capacity within a small area. When the solar panel capacity increase, the cost of the solar panel also increases proportionally.
The solar panel prices vary according to brand. There are many solar panel brands in the world. Jinko, Trina, JA Solar are a few of the “Tier 1” Chinese photovoltaic panel brand names. Other brands like SunPower, Suntech, LG are also in the “Tier 1” category. Different manufacturers build up brands to position their products in their customers’ minds. For example, some panels may be premium while others can be economical. The price will also depend on the manufacturers’ brand.
However, because of the repercussions of the COVID-19 pandemic, there is a shortage of silicon supply. On top of that, there is an energy crisis affecting most high GDP countries, like China and countries in Europe. Because of this reason, the prices of all goods and services increased. It affects the solar panel industry as well. China has closed down several manufacturing plants to save power. Because of this situation, the prices of solar panels increased in the last quarter of 2021. However, economists say that this situation may prevail until the end of winter.