In the solar energy business, cost and pricing is divided into three main categories. They include those buying small quantities (those who just need a little amount of kilowatts for their consumption), mid-range buyers (those who may need electricity of up to 10 Mw annually) and the large quantity buyers.
The prices of solar panel have been reduced by about 250 times comparing current prices with those in 1970. This is because of the development of cheaper ways of producing solar panels. The fact that there are many companies in every country producing the same product has also led to the decline in pricing, from about $150 a unit to just $0.60 per watt.
Factors affecting solar panel prices
Weather and climate
Prices of solar panels depend on the weather and climate conditions of the location where they are installed. Price per kilowatt in often cold and overcast North England is more expensive than in the sunshine-filled parts of Spain.
This is because the panel installed in North England have to be specially engineered since sunshine is scarce in North England. In Spain, however, the construction of solar panels used in that part of the world is really simple as sunshine is always available over there. This means that it is easier to produce electricity in Spain than in North England and that affects the pricing.
RMI and BOS factors
Half of the total installation cost is mainly determined by RMI and the elements of the balance of system (wiring, racking system and several of other components). It will depend on the solar panels installation company and their pricing. Prices are determined by the amount of money used in the production of electricity.
Obviously, the cost will be higher than the production cost because solar panels installation companies all want to run profitable businesses. However, prices also depend on the location of solar plants and how far away the source of electricity (the plant) is from you, the customer. This type of electricity production is common in areas where there are alternatives for electricity generation from fuel-powered generators. Thus, the cost of electricity in these areas is sky-high.
Wholesale grid parity
Generally, solar power systems yield smaller bills than other typical sources of electricity in the market. That’s because they doesn’t need a lot of maintenance and as long as it is getting enough sunlight, electricity is unlimited.
For those who rely on solar energy using “busbar parity” or “wholesale grid parity “, their bills is lesser than all the other fuel sources and even the reliance of hydroelectric power, mostly during the summer when the levels of water sometimes go down – reducing the amount of water used to turn the turbines. Most solar energy systems need very little regular servicing and maintenance. These factors have become the reasons why solar energy systems are so popular throughout the world.