Is 2020 the best year to purchase solar? Let’s, examine the data and find out. I’m Johnathan Stewart and welcome to cleaner one like any technology. Photovoltaic panels or PV solar panels have had massive improvements and cost reductions over the years.
Solar is now a mature product with over 60 years of commercial viability. In 1955, Hoffman electronics introduced the first commercial photovoltaic product with a 2 percent efficiency and an energy cost of 17 hundred and eighty-five dollars per watt.
Now this is 1955 dollars. So if we adjust for inflation in today’s, money that would be somewhere around seventeen thousand one hundred and eighteen dollars per watt. Now here we are in 2020, and PV solar panels have an efficiency right around twenty percent on average and the cost is on average somewhere around two dollars and ninety six cents per watt.
Modern solar panels are ten times more efficient and fifty-seven hundred times less expensive. If you adjust for inflation, so let’s, examine the data and see why 2020 just might be the best year to purchase solar.
So, as I mentioned in the beginning, the first commercially viable solar panel had an efficiency of around two percent. Here’s, a list of some of the top solar panel brands and they’re rated efficiencies.
You’ll, see there that Sun power actually has some of the most efficient solar panels on the market topping out at twenty two point: two percent Panasonic, which also has a solar partnership with Tesla, has an efficiency of up to twenty one point: six Percent and then, of course, LG up to twenty one point: one percent you’ll, see that there are many choices right around that twenty percent range, and so efficiency has reached a good place in the technology right now.
Another important thing that helps you determine the best time to purchase solar is the average cost per watt of a solar system. The cost of solar has fallen 22 % over the last five years or an average of four point.
Four percent: each year here’s. A five year. Look of the average cost of solar. You’ll, see there from 2015 to 2016, the ice decreased 11 % from 2016 to 2017. The price per watt decreased, 6.8 % from 2017 to 2018, the price decreased 2.
5 % and from 2018 to 2019, the price has decreased. On average 2.9 percent, you’ll notice there that the price per watt appears to be stabilizing. Some are around that two and a half to three percent mark, so not only is a cost per watt of solar stabilizing, but also the u.
s. federal tax credit will be ending after 2021. Currently, right now in the United States, if you put solar on your residential or commercial property, you can take a twenty six percent tax deduction off of the cost of solar in 2021.
The deduction will go down to twenty two percent, for both residential and commercial and in 2022 the residential deduction will disappear and a ten percent deduction for commercial only will apply. Now let’s.
Take a look at the actual cost for an eleven point. Four kilowatt array of solar and we’re, going to factor in both the cost per watt decreases of three percent each year, as well as the decreases in the tax deductions to see the actual lowest price in the next few years of purchasing solar.
So in 2020, if you were to purchase an eleven point, four kilowatt solar system based on the two dollars and 96 cent per watt average. You would come up with a system that costs thirty-three thousand seven hundred and forty four dollars.
If you deduct the twenty six percent tax deduction, that system now costs you twenty four thousand nine hundred and seventy dollars, or just around two dollars and nineteen cents per watt in 2021. If we factor in a three percent cost a decrease for the cost per watt of solar and we factor in the twenty two percent tax deduction, we come to a total of twenty five thousand five hundred and thirty dollars or two dollars and twenty four cents per Watt in 2020 to a residential system once again factoring in that three percent decrease in the cost of solar per watt with no tax deduction would come out to about thirty one thousand, seven hundred thirty six dollars or $ 2 in 78 cents per watt.
So you can see based on these numbers, that financially 2020 is a really good year to purchase solar. If the US government does not extend the tax credit or add a new tax credit for solar, it’ll, take somewhere around 10 years before you can achieve that price of $ 2 19 cents per watt, with just the 3 % each year.
Cost decrease of solar alone. Another factor that supports getting solar as soon as possible are the rising electricity costs. According to EIU gov, the average monthly bill in the United States in 2018 was a hundred and seventeen dollars and sixty five cents.
That is up five point. Four percent from the average bill in 2017 and up 4.5 percent from the average bill in 2016, so electricity prices are on the rise. According to that same data from EIU gov from 2017 to 2018, there were six US states that actually saw a rise in electricity cost.
Over 10 percent. Rhode Island tops the list with a 14.5 percent average electricity bill increase Hawaii with a 12 point, 6 percent increase Massachusetts with a 12 point, 3 percent increase, as the price of electricity goes up and the price of solar goes down.
It of course, makes more sense to get solar as soon as possible, something that almost everyone looks at when they’re, determining whether to purchase solar or not is the payback period of the solar system.
Well, according to energy sage, the typical solar payback period in the United States is somewhere around eight years. Of course, in sunny states like California, that number is less and in more cloudy states like the Pacific Northwest.
Of course, that number might be greater some of the factors that could change. These numbers are the monthly kilowatt hours of electricity consumption, your costs per kilowatt hour of electricity, how many Sun hours per year you get the size and cost of your PV system, and also whether you have a good battery storage system or not another reason to get Solar as soon as possible is, of course, to transition our electricity generation over to renewables as quickly as possible.
According to the EPA and 20 17:28 percent of the USA’s, greenhouse gas emissions came from electricity generation, the more solar we deploy the lower. This number can go and we can decrease our greenhouse gas emissions and also our air pollution.
So, in conclusion, because of the high efficiency panels that we have today, plus a very substantial tax credit which will be going away after 2021 and the low cost of solar per watt and with a price stabilization 2020 sure appears like the best year to purchase solar.
We obviously don’t, know the future and what’s going to happen, but based on the data that we do have? This all equates to one of the best prices you’re gonna get on solar and anytime. In the near future, thank you so much for watching this video.
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