Should I Wait for Better Solar Technology? (2019)

When researching solar, some homeowners come to the conclusion that they should wait for solar technology to improve before installing. What these homeowners find through their research is that solar efficiency is improving every year, so they think that if they wait for the technology to improve, they will be able to pay less money for a more efficient panel, which will improve their return on investment in the long run. While it is true that solar technology will inevitably improve, there are other factors that can make going solar sooner rather than later advantageous. So what we want to address in this blog is the different factors to consider when deciding when to install your solar, and to show - through explaining those factors - why going solar sooner rather than later is better in the long run.

Efficiency Improvements are Slowing

The first thing we should address when it comes to the question of whether you should wait for solar technology to improve is to look at how fast solar technology has improved in the past, to get an idea of how fast it will improve in the future. SunPower has always manufactured the highest efficiency commercially available solar panels, so let’s look at a timeline of their panel efficiencies to see how much they have changed over the past few years.

May 2010: SunPower releases 19.5% efficiency E19 Solar Panel

July 2011: SunPower releases 20% efficiency E20 Solar Panel

2018: SunPower releases 22.7% efficiency X-Series solar panels

March 2019: SunPower releases 22.8% efficiency A-Series Solar Panels

So as you can see, the efficiency of solar panels, while it has improved, has gone up very incrementally. In nine years, it has basically gone up 3%. On top of that, there is a ceiling for how efficient solar panels can get. The reason is that crystalline silicon solar cells have an efficiency ceiling of around 29%, and realistically, because cell efficiency is higher than module efficiency, the maximum panel efficiency is around 25%. Since we are nearing that threshold, homeowners who are waiting for a higher efficiency to get installed are waiting on very minimal gains, and are missing out on savings as a result.

The Federal Tax Credit is Going Away

The other major factor to be considered when deciding when to install solar are Tax Credits that are available. Right now, the Federal Solar Tax Credit is still available, and is at 30%, which means that if you purchase your solar, the government will give you an income tax credit that equals 30% of the cost of your solar installation. Seeing how the average solar installation is around $20,000, that can be a hefty chunk of change.

What homeowners should know about the Federal Solar Tax Credit is that it is being phased out after this year. It will drop from 30% this year down to 26% next year, so for those homeowners who are waiting for solar technology to improve to install solar - they may be doing themselves a huge disfavor if they don’t go solar this year. That little bit of extra ROI that you may get from that small percentage of extra efficiency does not compare to 30% of your system being paid for.

Solar Panel Prices are Leveling Out

The assumption that many homeowners have about solar panel prices is that they are falling dramatically every year. While there was a steep decline in price per watt between 2014 and 2018 of almost 20%, prices have mostly stabilized. From 2017 to now, prices have dropped, but only by 3.8%. So for homeowners that are waiting for prices to fall dramatically to purchase, they are waiting for cents on the dollar. If you balance that against the savings you get from taking advantage of the solar tax credit, then there really is no comparison in savings.

Electricity Prices Will Continue to Go Up

The thing about solar is, the longer you wait to install it, the longer you have to pay the utility for power, and are therefore subject to the crazy rate hikes that come along with it. In San Diego we have some of the most expensive electricity prices in the world, and just last year SDGE requested a 28% rate hike over the next few years. If you installed solar, you would be able to reduce or eliminate the amount of power you have to buy from the power company, and therefore would not be subject to those increases. Homeowners who install solar no longer have to worry about rate increases, and may actually take joy in the fact that as those rates go up, their savings are compounding.

So as you can see, there are many reasons to go solar now instead of waiting for solar technology to improve. The truth is that the evolution of solar technology is slowing, efficiencies are inching up, and prices are leveling out - all while tax credits are going away, and electricity is becoming more expensive. So if you wait to install solar, you will miss out on the massive savings of the tax credit and the potential money saved by not having to pay the utility. So right now, this year, may be the best year to install solar ever.