The remarkable drop in prices of solar panels over the past few decades has stimulated solar adoption rates across the US. Despite its small size, Connecticut has spearheaded an exemplary solar incentive program, which has resulted in the increased adoption of solar energy by households.
Complementing the state’s solar incentives, the federal tax credit incentive has only fueled the state’s efforts to go greener. Today, an average homeowner can buy a solar panel system and expect to recover all their money within 6-7 years.
How is this possible?
Are solar incentives the prime reason for solar energy’s affordability? If so, then what happens when the incentives are rolled back?
What other factors are pushing down the prices of solar panels? And, how long will they work?
Let’s find answers to these and many more questions today.
Of Course, Solar Incentives Work!
The federal tax credit alone slashes the cost of solar power systems by as much as 26%. That’s a steep discount on a long-term investment like this. Other incentives like net metering, RSIP, sales tax incentives, and so on make solar power systems remarkably cost-effective for homeowners in Connecticut.
Other Reasons Why Solar Panel Prices Have Plummeted
A recent study by MIT researchers has shed more light on the factors contributing to the affordability of solar panels. They discovered that solar panel prices have dropped due to several reasons, including government-funded research, government incentives, economies of scale, and other factors.
The study attributes the lion’s share of success in reducing solar panel prices to economies of scale. The ever-growing size of solar panel manufacturing plants has played an instrumental role in bringing down the costs. This, in turn, was made possible by a fervent rise in demand for efficient photovoltaic cells from across the world, especially in countries like Japan, Germany, China, Spain, and others.
This demand is slated to increase rapidly on account of the recent Paris Agreement on climate change. As the demand rises, the prices continue to drop.
As a result, solar panels will continue to become more affordable with time.