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How Has Solar Technology and Prices Evolved Over Time?

solar panel cost

The energy from the sun in the form of light and heat has so much effect on the earth we live in. The sun is believed to be the earth’s power and without the sun, the earth becomes uninhabitable. Plants use the sunlight for photosynthesis. Many other inhabitants of the earth also draw energy from the sun, not excluding man. The solar system has been in existence before man and as it is known of man to use the surrounding elements to his own advantage, the sun will not be spared. Man, since time immemorial, has found ways, no matter how crude, to tap energy from the sun. This energy is then used for different purposes. History has it that the energy from the sun was tapped by the humans many years ago in other to light fire. The magnifying glass is the instrument used to achieve this feat.

Also according to history, the Romans and the Greek were said to use energy from the sun to light touches for religious celebrations. They used mirrors to tap solar power. The Chinese were documented to use solar power for the same purpose. The concept of the sunroom in houses and buildings, which is still popular today, is an idea powered by tapping energy from the sun. The sunroom in a building uses huge windows to concentrate sunlight to an area in a house. The general idea behind tapping solar power in the early years revolves around the use of mirrors.

Regardless of the reasons solar power is interesting to us and what purpose we try to find in it, it is certain that solar power is useful to us. It is this usefulness that has triggered the desire to make research along this line. Today, solar power has a long list of uses, with a major focus on how it can generate electricity for us. This has drawn us away from the use of mirrors and massive glass to concentrate the power of the sun to the development of solar panels. The general idea behind the solar panel is to collect photons from the sunlight and then transform them into electrons to produce direct current. The direct current will then be inverted or converted into alternate current which is the electricity we use. The materials from which the panels are made are different. However, the general idea is usually the same.

New-age solar panel technology

Fifteen years ago, the idea of going solar was like a dreamer’s idea. This is because of the low level of development around the use of solar panels. First, the challenge was how to go from the use of mirrors to a component that will attract the solar energy and then give it out in the form of electricity. We scaled through that by the discovery of PV effect (Photovoltaic effects) which was of great influence and the first leap toward the development of a solar panel that generates electricity. From there, it was discovered that a material called selenium does generate electricity when it is been exposed to sunlight. This took us to a whole new level and served as the basis for the majority of the solar panels we have today as they are made from silicon. That was how the first challenge was solved. The use of silicon in making solar panels took effect and began to serve as a source of renewable energy about 10 years ago.

The bridge has been crossed and we now know how to tap solar energy to produce electricity. However, the first few years of this development were faced with two major challenges:

  • The efficiency of solar panels
  • The cost of solar panels

The efficiency of solar panels:

Solar panel efficiency refers to the fragment of sunlight energy that a photovoltaic panel can convert into electricity for consumption. The first generation of solar panels produced was not very efficient. The rate of conversion of solar light or photons absorbed to the electricity produced was very low. They had less than 1% conversion rates. This made the possibility of using solar energy unlikely. However, the relentless effort of researchers has brought about a great improvement in the efficiency of the panels. Today we have solar panels that are 30% efficient, and work is still been done to develop more panel efficiency.

Recent development claims to have gotten a 42% efficient solar panel. 1960 to early 2010 recorded a low efficiency of solar panels. It was in 2012 that things took a good turn when efficiency increased to about 17.8%. Late 2015 also gave the good news of 22% efficiency. In early 2016, NREL (National Renewable Energy Laboratory) and CSEM (Swiss Center for Electronics and Micro-technology) achieved a 29.8% efficiency rate. 2017 gave an increase in efficiency to above 40%. In 2019 there has been an integration of various mechanisms into the development of solar panels that has given a great increase in the efficiency rate and research still continues. The disadvantage of this great development is that these highly efficient panels are made from expensive materials and these materials are costly.

The cost of solar panels

The first generations of solar panels were not only low in efficiency they were also very expensive. This added to the constraint of making solar power commercial. However, in addition to the increase in efficiency rate, manufacturers have improved their production process and this has reduced the cost of solar panels to a bearable minimum. Solar manufacturers also put in some economic indices to minimize the cost of production. Today the concept of renewable energy has grown commercial levels.

Should You Lease or Loan Your Solar Panels?

Solar panel lending or a PPA agreement basically means you are renting the solar panel from the manufacturer and that the manufacturer still owns the solar panel. On the other hand, if you install your solar panel system on a loan agreement, then it belongs to you. It can be pretty difficult to make the decision whether to loan or lease your solar panels.

Pros and Cons for Solar Renting

This write-up will examine the pros and cons of both methods and provide you with all the information you need to know to help ease your decision.

solar renting pros
  1. The financial implications of a lease or loan agreement: both the lease and loaning of the solar panel help you save money. Both the leasehold agreement and the loan agreement lead to a reduction in your energy expenditures. In both forms of solar panel agreements, you pay less than your usual electricity bills.  The loan agreement, however, saves you more money than the leasehold agreement. This is so because you pay for the panel loan over the course of 7 to 15 years, whereas, you have to continue paying a leasehold agreement all through the term of the agreement. Solar panel owners get a solar investment tax credit (ITC) which is the value of 30% of the cost of solar installation and some states also provide Renewable Energy Certificates (SRECs). Interest accrued on a solar panel loan can be tax deductible.
  2. Cost of maintenance of the solar panel: solar panels generally do not need much maintenance, but when maintenance is required, a loan agreement means the owner of the solar panel has to pay for such maintenance while the manufacturer pays for maintenance of the leasehold agreement since the solar panel is still a property of the manufacturer.
  3. Does the amount payable increase over time in leasehold or loan agreement? : The answer to this is “yes” for the former and “no” for the latter. The premium paid monthly on a leasehold agreement increases annually based on the initial agreement reached or changes in company policy, while the agreed premium on the loan agreement is fixed during the duration of payment and cannot be increased.
  4. Processing time involved in leasehold or loan agreement: leasehold agreements typically do not take time and can be concluded in just a visit whereas the opposite applies for the loan agreement. The loan agreement usually takes time to be concluded.
  5. Ease of selling buildings with solar system leasehold or loan agreement: for you to sell your home with a solar panel leasehold agreement attached to it, you have to either buy out your leasehold agreement or transfer the new lease to the new owner of the building. In the case of a loan agreement, your options depend on if the loan is secured or not. It is far easier to sell a property with a solar loan agreement than that of leasehold agreement. 
  6. Ease of obtaining a leasehold or loan agreement: All fifty states in the U.S. allow for the loan agreement of solar panels ownership, while some regions and state frown upon the leasehold agreement of solar panel ownership. Washington DC is one of the regions that allow for a leasehold agreement.

    These are the factors you should consider before opting for either leasehold or loan-based agreement.

Is Renting Sun-Based System Always The Best Thing To Do?

In recent years, third-party sun-based renting has become extremely popular, which has played a major role in propelling rooftop sun-based systems into the prevailing current thought. According to the SEIA, at the beginning of 2014, solar renting/PPA financed about 50% to 90% of the rooftop sun based system installations based on the state. It can be said that the U.S. sun-based system industry has changed radically from solar renting.

But is renting sun-based system always the best thing to do? As a smart sun-based system shopper, you should be careful since these financial mechanics are still comparatively new. This point can be further seen in the recent attempts of quite a number of individuals of the national legislative assembly to give a better understanding on how solar renting is promoted to consumers for both the interest of those in the market and also for the solar industry as a whole.

Is solar a beneficial bargain? An example of a solar rent marketing promotion

The advantages of solar rent are mostly marketed this way: You get a sun-based power system on your roof for a small amount of money or even no money at all (based on the type of solar rent), and the organization will sell the electricity to you at a rate which is much lesser than what you normally pay for electricity. You spend less on your electricity bill without having to pay to have your system to be set up. Apparently, both you and the solar organization benefit from this.

Merely looking at it, it seems like a cool bargain, but as discussed earlier, ‘free sun-based power systems’ are not precisely free. You indirectly pay for the power that the panels generate, and in so doing, over the period of your 10 to 20 years contract, you pay for the system.

It’s important for you to consider if signing a solar renting contract will save you money in the long run. Without considering a solar rent marketing promotion, what exactly are you getting when you sign a solar rent contract?

Are some sun-based power system companies not been truthful about solar renting?

An issue of interest about potentially misleading marketing patterns by some solar rent suppliers was raised last month by 12 members of the House Republicans, which was led by Paul Gosar from Arizona. In a letter written to the Chair of the Federal Trade Commission, the representatives identified a number of refutable practices that solar shoppers should bear in mind and that the FTC should look into.

Some of these practices are:

It has been made known that some firms are using possibly misleading marketing methods and exaggerating potential savings to get consumers to sign prolonged rents for rooftop sun-based power systems. According to reports, consumers are being lured by some solar renting firms who offer no rent money for a 20-year rent agreement. The marketing presentation, notwithstanding, supposedly amplify power grid rates. If these accusations are true, these potentially deceptive rents could be a grievous threat to consumers as they are bound to our citizens’ homes and have the possibility to induce substantial damage to the solar industry.

In a similar move the previous month, four House Democrats who were all from Arizona (one of America’s major solar markets) asked the Consumer Financial Protection Bureau (CFPB) to look into it whether it is possible for consumers to be harmed by the sales practices.

In the November 19 letter, they emphasized their support for the flourishing rooftop sun-based power industry. They also stated the need to address a number of issues to ensure consumers considering solar are not deceived by solar salespeople who deliberately omit essential information or skip over the disadvantages of solar rent.

They asked the CFPB questions like:

What actions has the CFPB taken to look into the possibility that deceptive marketing methods are being used in the rooftop solar industry?

What measures are put in place to guarantee that consumers who are looking at entering into solar renting for a prolonged period are made fully informed of the long-term implications of these proceedings? For instance, studies suggest that third-party rents may lead to an escalation of prices to house sellers with the outcome that other buyers will not want to purchase the sun-based power system or cannot assume the rent, therefore making real estate transactions complex.

What actions has the CFPB carried out to look into the displeasure that has developed from the marketing methods being used by some rooftop solar renting companies?

Has the CFPB thought of doing an employee reappraisal of third-party-rents in the rooftop sun-based power industry and giving advice on how consumers considering these transactions can be educated?

The CFPB is yet to release anything a response to the Democrats’ letter as at the time of this writing, and the FTC addresses nothing in particular to third-party solar rents on its website. It’s definitely just a matter of time before all these changes are made. Even though politics has a role in the ongoing discussion, the fact remains that there is a need for robust competition and transparency in the market for an industry to be a workable, sustainable one. If the CFPB and FTC intervene to regulate the sales practices of solar rent suppliers, it will definitely result in amelioration on both these fronts for the absolute benefit of both the consumers and the solar industry.

Can we safely conclude that solar renting is not a good idea?

No! It only requires that you do your own research to ascertain that you are getting the best available bargain on solar. You should also bear it in mind that deals differ and some deals are more beneficial than others. You need to be wise when shopping for solar. Below are some helpful points to help you choose wisely when shopping:

solar renting
  • Assume your rooftop is an asset that solar renting firms want to possess. The amount of money these firms make is dependent on the amount of power your panels produce.
  • Think of a solar rent just like any other major purchase: Be proactive; do not just consider the fact that you may not pay anything up-front.
  • Try to get the best deal by comparing varieties of options from different companies. There are a number of competing companies that offer solar renting bargains; use this for your advantage.
  • As an alternative to solar renting, consider a solar loan. Solar loans offer almost the same advantages as solar renting with the additional benefit of you owning the system when the loan is paid off.
  • If you have enough money, then you should consider buying a solar system. For those who can afford it, it’s often always better to go for the up-front buying of the solar system.

Solar Evolution – How Has Solar Technology and Prices Evolved Over Time?

The energy from the sun in the form of light and heat has so much effect on the earth we live in. The sun is believed to be the earth’s power and without the sun, the earth becomes inhabitable. Plants use the sunlight for photosynthesis. Many other inhabitants of the earth also draw energy from the sun, not excluding man. The solar system has been in existence before man and as it is known of man to use the surrounding elements to his own advantage, the sun will not be spared as well. Man since time immemorial have found ways, no matter how crude, to tap energy from the sun. This energy is then used for different purposes. History has it that the energy from the sun was tapped by the humans many years ago in other to light fire. The magnifying glass is the instrument used to achieve this feat.

Also, the Romans and the Greek were said, according to history, to use energy from the sun to light touches for the religious celebration. They used mirrors to tap solar power. The Chinese were documented to use solar power for the same purpose. The concept of the sunroom in houses and buildings which is still popular today is an idea powered by tapping energy from the sun. The sunroom in a building uses huge windows to concentrate sunlight to an area in the house. The general idea behind tapping solar power in the early years revolves around the use of mirrors.

Regardless of the reasons solar power is interesting to us and what purpose we try to find in it, it is certain that solar power is useful to us. It is this usefulness that has triggered the desire to make research along this line. Today, solar power has a long list of usefulness to us with a major focus on how it can generate electricity for us. This has drawn us away from the use of mirrors and massive glass in other to concentrate the power of the sun, to the development of solar panels. The general idea behind the solar panel is to collect photons from the sunlight and then transform them into electrons to produce direct current. The direct current will then be inverted or converted into Alternate current which is the electricity we use. The materials from which the panels are made are different. However, the general idea is usually the same regardless.

New-age solar panel technology

Fifty to even just twenty years ago, the idea of going solar was much more novel and pricey. This is because of the low level of development and wide-spread manufacturing around the use of solar panels. Firstly, the challenge was how to translate from the use of mirrors which is majorly to produce heat and set a fire, to a component that will attract the solar energy and then give it out in the form of electricity. We scaled through that by the discovery of PV effect (Photovoltaic effects) which was of great influence and the first leap toward the development of a solar panel that generates electricity. From there, it was discovered that a material called selenium do generate electricity when it is been exposed to sunlight. This took us to a whole new level and served as the basis for the majority of the solar panels we have today as they are made from silicon. That was how the first challenge became solved. The use of silicon in making solar panel took effect and began to serve as a source of renewable energy about 15 years ago.

The bridge has been crossed and we now know how to tap solar energy to produce electricity. However, the first few years of this development was faced with two major challenges which are:

The efficiency of solar panels:

Solar panel efficiency refers to the fragment of sunlight energy that a photovoltaic panel can convert into electricity for consumption. The first generations of solar panels produced were of very little efficiency. The rate of conversion of solar light or photons absorbed to the electricity produced was very low. They were as low as having less than 1% conversions rate. This made the possibility of using solar energy a far cry and looks almost impossible. However, the relentless effort of researchers has brought about a great improvement in the efficiency of the panels. Today we certainly have solar panels that are 30% efficient and more work is still been done to develop more panel efficiency.

Recent development claims to have gotten a 42% efficient solar panel. Before the year 2012, the previous years, 1960 to early 2010, recorded a low efficiency of solar panels. It was in 2012 that things took a good turn when efficiency increased to about 17.8%. Late 2015 also gave the good news of 22% efficiency. Early 2016, NREL (National Renewable Energy Laboratory) and CSEM (Swiss Center for Electronics and Microtechnology) achieved a 29.8% efficiency rate. 2017 gave an increase in efficiency to above 40% and in 2019, there has been an integration of various mechanisms into the development of solar panels that has given a great increase in the efficiency rate and research still continues. The disadvantage of this great development is that these highly efficient panels are made from expensive materials and these materials are costly.

The cost of solar panels

1st generation solar panel

The first generations of solar panels were not only low in efficiency they were also very expensive. This added to the constraint of making solar power commercial. However, in addition to the increase in efficiency rate, manufacturers have improved their manufacturing process and this has made the cost of solar panels much more affordable. Manufacturers also put in some economic indices to minimize the cost of production. Today the concept of renewable energy has become wide-spread, thanks to relentless researchers and economies of scale making the technology accessible to the masses.