Tuesday, February 23rd, 2010 11:27 am
Residential and commercial solar systems currently enjoy state and federal incentives that cover approximately 43% of the total system cost. While federal incentives are expected to be in place at the same level until 2016, the state incentives come down as more systems are installed on homes and businesses. In San Diego County, we moved into step 6 of the state incentive ($1.10/Watt) in October of 2009, and we expect to move into step 7 of the state incentive ($0.65/Watt) sometime in April of 2010. This means that on average, the state incentive will be reduced from 18% to 11% of the total system cost. In 2007, when the state rebate program started, incentives were $2.50/Watt. So don't wait any longer. If you do, you will still save money on electricity bills, but you will miss out on attractive rebates.
Example of 3kW Residential System (Before April 2010)
Total System Cost $18,000
State Rebate $3,300
Federal Tax Credit $4,410
Net Cost $10,290
Example of 3kW Residential System (After April 2010)
Total System Cost $18,000
State Rebate $1,950
Federal Tax Credit $4,815
Net Cost $11,235
Contact us for a free energy assessment at 800-411-SOLAR or info@SolareEnergy.com
Tuesday, November 17th, 2009 7:01 pm
Solar panel prices are at an all-time low. Please read article below from Paula Mints.
Module pricing: Rational, or just plain nuts?
by Paula Mints, Navigant Consulting, Palo Alto, CA USA;
In 2009, the market for solar products continued to soften, and by September, prices had crashed by 32% to 42%. This was great for the system integrators and installers who could source cheaper modules, (hard to resist at these prices!), but not so good for technology manufacturers who experienced squeezed margins and downward sloping revenues.
(In fairness, system integrators have felt pressure to provide ever-lower system prices.)
2006 was a particularly auspicious year for price increases, with average module prices rising by 30% for the small buyers, 7% for mid-range buyers, and 12% for large-quantity buyers. The significant turnaround in pricing of 2009—which could be described as an overcorrection—does not mean that an efficient market price was arrived at. Rather simply, the market was willing to pay more at one point than it was at another.
In 2009, soft demand because of the loss of a major market (Spain), a global recession, and problematic debt markets (among other reasons) drove prices down, while significant levels of inventory on the demand side allowed a vibrant secondary market to develop. Suddenly, there were daily, always-downward pricing changes. The global market for cells and modules pseudo-corrected because it crashed—not a healthy situation for anyone.
On the manufacturer side (supply), the module business was unprofitable for more than 30 years, up until the boom; average pricing during some of these years was below cost. During the boom, margins swelled along with profit, and the industry behaved as if the party would never end.
The PV industry remains in start-up mode with applications, business models, marketing strategies, and technologies continuing to mature. As the high-growth grid connected application remains incentive-driven, it is hard to drape solid economic theory over industry pricing behavior. Moore’s Law (the doubling of transistors per square inch on an integrated circuit doubles every 12 to 18 months) does not apply perfectly to pricing. Over the long term—and only in the long-term—there is clearly a systematic reduction in the price of cells and modules. In the near- to medium-term, though, there are many hiccups (up and down) in cell and module prices, and a smooth line cannot be observed. Until there is true, un-incentivized pull in the market for solar products, wild swings in demand and pricing will continue.
Efficient market theory holds that the market will establish (with the occasional correction) a rational and correct price for a good. This is great in theory; however, the market is an organism that reacts to market pressures by often inflating prices (supply side) when market conditions are good, and madly deflating them when market conditions turn in the other direction. It does this for any good, often regardless of its manufacturing cost.
With easy access to information these days, the overload of constant module price updates can and does trigger much anxiety. Market drives price, and also value, and people are the market. Understanding this does not exactly help manufacturers ameliorate pricing anxiety, particularly when all around prices can be observed dropping like stones into a pond.
So, accepting that the market is not logical or efficient when it comes to pricing, what does this mean for solar? It means that there are no set rules for market pricing, but some understanding of the triggers might slow panicked selling.
In the case of cost reduction, the PV industry can be proud of the significant progress it has made in reducing manufacturing cost and increasing efficiency. In this arena, there is some logic—and in an industry with downward price pressure (live by the incentive, die by the incentive), lower costs are a necessity.
Lowering costs. Now there is a rational war worth fighting.
This article is from Photovoltaics World
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