The glut of solar panels is almost over
Prices on solar panels have plummeted in recent years, over 50% in some cases and mostly over the last two years. Does this mean that solar panel prices will continue to go down? Unfortunately the short term answer is no.
About four to five years ago the global demand for solar panels skyrocketed and it seemed like it would not end. This was due to aggressive incentives in place in countries like Germany, Spain, France and the Netherlands and in some states here in the United States. Solar panel manufacturers could not keep up with this sudden demand and new manufacturers started popping up all over the world, especially in China. Some factories that made other products quickly converted their factories over to produce solar panels. As the global supply of solar panels surged, goals for installed solar were reached faster than expected, so a lot of incentives were cut long before anticipated. This slowed down the demand for solar panels just as production was ramping up. The result was a huge global oversupply of panels.
With supply and demand being the engine for pricing, prices fell precipitously. Manufacturers could not unload their huge stocks of panels profitably and making more, at a profit, was impossible in those market conditions. Several manufacturers could not absorb these losses and went out of business. Solyndra is probably the best known case thanks to an election season during this volatile time. Solyndra made reasonable investments based on market projections and when the future turned out to be nothing like what was predicted, they found they could not compete and went under. They did have a great product that is now being copied by other manufacturers.
As a Rhode Island solar panel installer, I have always considered that warranties on panels are twenty five years long and to be there to honor that warranty, a company has to be stable enough to survive ups and downs in the market. Chinese products have a bad track record so I have tended not to use them. It gives me confidence to know the manufacturers I’ve chosen to work with are still in business and in some cases, growing!
Now with the glut of solar panels almost over, prices are stabilizing and are predicted to go up a bit in the coming year. Prices for solar panels in Rhode Island are still low and with the RI solar grant in place, solar in Rhode Island may be as affordable now as it will be for the next few years!