Friday, October 17, 2014

Why Solar Power is Getting Cheaper


1) Solar modules are getting more efficient. "This doesn't necessarily make the modules themselves cheaper," Kann says. "But as modules get more efficient, you can get the same amount of power in a smaller area of your roof, which makes it easier to install, you need less racking and wiring, and it saves money on balance-of-systems costs.

2) System manufacturers are facing pressure to cut costs. Again, back in 2008 to 2012, panel manufacturers faced a lot of competition and pressure to cut costs. Nowadays, that same pressure applies to the people making other parts of solar systems — the racking, for instance.

3) Economies of scale. Historically, the residential solar market consisted of thousands of small local installers who had high costs for finding new customers. But nowadays, the rooftop solar industry is dominated by some large companies — particularly SolarCity and Vivint, who had half the rooftop market in the second quarter of 2014. "So as the big guys gain more scale," Kann says, "you see some savings out of that."

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