Many homeowners struggle with the decision of whether to go solar now, or wait until some time in the future. They hear about the steady growth in quality and efficiency of solar technology, and they notice how the price of solar panels continues to drop over time. The question is: Can you save even more money if you just wait? Everything is a tradeoff, so if you’re looking to save money with solar, is it better to install solar panels now, or wait until the technology improves?
At Palmetto, we hear these types of questions from prospective customers all the time. Our response to them is simple: “It’s better to start saving money now, than to wait for some mythical future energy technologies that might never arrive. Avoid analysis paralysis! There’s always going to be some tempting change right around the corner, but you could be saving significant money today.”
With this article, we will review the four primary factors that homeowners should understand about the pace of technology innovation for solar panels. With this knowledge, we hope you’ll understand that waiting for better solar technology in the future means losing out on tangible savings in the present.
1. Improved Solar Panel Efficiency
The best home solar panels in the United States market in 2022 top out at around 23% efficiency, which measures the panel’s ability to convert sunlight and generate electricity. This represents an improvement of about 3% over the prior 12 years. That’s great news, as you can meet your home’s energy needs at current efficiency levels. It also means you don’t need to wait for solar panel efficiency to get any better in the future to see substantial savings.
Will the industry continue pursuing increased efficiency? Absolutely! The more efficient the panels, the fewer panels you might need on your roof to provide the same amount of electricity for your desired system size.
But while solar technology continues to improve, the current pace of this growth is not expected to yield significant short-term savings. Thus, there’s no benefit from waiting to install solar panels based upon perceived future increases in efficiency.
One thing that has changed is the average watts that each solar panel can produce. In 2012, the average was closer to 200 watts per panel. In 2022, Palmetto is now using panels that average around 400 watts per panel.
However, even though the watts per panel has doubled, the cost per panel has increased as well, since more efficient panels are also more expensive to produce. So while the average watts per panel has increased, the cost per watt has decreased by a much smaller percentage.
2. Reduced Equipment and Installation Costs
As solar panel efficiency improves, so too does the overall process and technology involved in the manufacturing, distribution, and installation of solar power systems. This has dramatically reduced those overall costs of solar, and coupled with government incentives and global manufacturing, solar panels are cheaper than they’ve ever been before. Thus, many people assume that they can wait to install panels in hopes that those prices will continue to drop.
However, there is every indication that the pace of price reductions will slow down in the near future. For example, consider the Federal Investment Tax Credit. This solar tax credit was designed to reduce the upfront cost of residential solar energy systems, and it could save the average homeowner thousands of dollars when they install a solar panel system.
Currently through 2022, you can deduct 26% of your solar installation costs from your federal taxes. In 2023, the tax credit will be reduced to 22 percent, and from 2024 and onwards, the deduction goes away entirely.
When you combine those shrinking residential and commercial tax credits with the 2018 solar panel tariffs passed by then-President Trump, there are several indications that our current low prices won’t last forever. For this reason, homeowners should invest in home solar panels now so they can take advantage of all the possible benefits and installation discounts.
3. Rising Energy Costs and Electricity Bills
While solar costs continue to slowly decrease, the price of electricity is continuing to rise. Depending on where you live, these increases are expected to continue at around two or three percent each year for the foreseeable future. If you install solar now, you can avoid those incremental cost increases from the utility companies, and even offset some of those costs thanks to programs like net metering.
In other words, for every year you don’t invest in solar because of potential improvements to solar panel technology, the cost of your existing electricity gets more and more expensive. Yes, solar technology will continue to advance, but there is money to be saved now by paying less to your utility company. Installing solar panels on your property is a great way to save money over multiple decades, instead of waiting for a big jump in solar panel efficiency that might never happen.
4. Increased Home and Property Values
Installing a solar power system has been shown to increase the value of your home, such as a study by Zillow that found homes with solar panels sell for 4.1% more. Solar panels can also help you sell your home faster and for more money than homes without solar power.
If there is any chance you’d like to sell your home during the average 25-year lifespan of solar panels, adding them to your home sooner than later is in your best interest.
Don’t Wait For Solar Technology To Improve
Everyone wants to make the right choices for their home, and one of those choices is whether or not to install solar power. Once you’ve made the decision to go solar, the next decision is when to actually have your solar power installed.
You definitely want to maximize your savings from solar panels, which means you should install top-notch solar technology that creates the electricity your home needs. Then again, no one wants to be stuck with outdated equipment that’s physically attached to your house, so it makes sense that you might want to wait for newer tech to arrive on the market.
Palmetto believes that the benefits of installing a solar power system now greatly outweigh any potential benefits associated with waiting for future improvements in technology. Don’t base your decisions about saving money and helping the planet upon what might happen in the future, and incremental improvements that may or may not occur. The solar technology of today can already help you reap the rewards of lower utility costs, cheaper solar panels, and valuable tax incentives.
Ready to find out how much you might save? Get started today with our free Solar Design and Savings Estimate Tool, and see what solar can do for your family.