It is true that technology and prices for solar improved every year over the last ten years. This all came to an abrupt halt in the Spring of 2022 when several factors caused the price of solar panels to suddenly rise. First, the post-COVID era of supply chain issues, rising raw material prices, and inflation were having their impact. Then came the government investigation into circumventing tariffs in SE Asia. And finally, POTUS placed a 24-month moratorium on tariffs after severe shortages and deferred projects threatened his green plans.
Prices have now stabilized, but what does this all mean to you and me?
Well, to begin with, many of the price pressures facing the solar industry will also be impacting utility electrical prices. The cost of everything is up and the utilities will be going back, cap in hand, to ask regulators for increased electricity rates for reasonable rates of returns for stakeholders. With the Federal Reserve raising interest rates, so must the utility returns go up accordingly to remain competitive, even if underlying costs remained the same. Of course, the cost of capital projects, maintenance and fuel have not remained stable. Expect higher electricity rates. Much higher.
The Federal and Arizona solar tax credits remain unchanged through to the end of 2022. Rising interest rates and unsettled capital markets are making a cash purchase of solar one of the better options for where to put one’s money. 30-year returns averaging 12%/ year, tax-free, earned through saving on monthly utility payments. Excellent investment, especially in these times!
Technological advancements in the conversion of the Sun’s energy into electricity continue at a brisk pace. Research into new materials, compounds and lattice structures within solar cells reminds us of how early we are in the development of products for this industry. It is more challenging to find cheap, plentiful, and environmentally friendly materials from which to construct these more efficient solar panels.
Of course, these developments are in the early stages and commercial applications could be years away. Waiting for advanced technologies before investing in solar would require differing some very real savings, continuing to pay your full utility bill. These expenses cannot be recouped.