As little as a few decades ago, solar power was seen as nothing but a pipe dream. While there was no doubt we could produce electricity from sunlight, the common wisdom said there was no possible way we could ever produce everything we needed using this alternative fuel source. And even if solar power did become viable, we were always going to need fossil fuels to fill in the gaps.
Fast-forward to today, and we have seen that solar power is not only competing with fossil fuels, but it's actively driving them out of some markets. Coal use is down around the globe, and we've already seen countries like Scotland and Denmark run entire days on nothing but green energy. Not only that, but solar power has gone from being prohibitively expensive, to being absurdly cheap by the standards of as little as a decade ago. In fact, the average homeowner can now take full advantage of a rooftop solar system for as little as $16,000 according to Energy Sage. That may sound like a lot of money (because it is), but that amount of money can be saved in as little as seven years in terms of energy bills. Or even less time, if the homeowner uses that solar power as a fuel pump, charging an electric vehicle or in tandem with in-home battery storage.
But there is a burning question in the minds of most homeowners who are considering solar panels. The question of whether they should buy now, or wait to see if prices get even lower.
On the one hand, according to every projection looking at the solar industry, solar arrays are only going to get cheaper. That means that if a homeowner waits as little as a year, it's possible the up-front costs (the scariest part of installing solar panels) can go down as much as $1,000. Maybe even more. But there is another cost involved in that waiting, and it's referred to as an opportunity cost.
An opportunity cost, simply put, is how much it costs you to do nothing. To not take an opportunity, as it were. So, while it's true that waiting to install solar panels does mean the eventual cost of installation will go down, you also need to ask how much money it's costing you to wait that long. Put another way, how much power would your solar panels generate, and how much money would it save you, to install them now instead of waiting a year, or two years?
That's the opportunity cost that many homeowners overlook. They focus only on the up-front cost of the system, but they don't look at how much energy it would produce, and what their savings would be. So paying an additional $1,000 to get your system this year might seem foolish, until you realize that it might save you that much, or more, in energy costs over the next year.
There are ways to take action, and avoid opportunity cost, though. For example, even if a homeowner can't afford to purchase a solar array outright, it's often possible to enter into an agreement called a solar power purchase agreement. In this situation, the company installs the solar array for little to no cost, and the customer agrees to pay a fixed rate for the energy it generates. This cost is typically much smaller than the cost the homeowner pays for regular electricity, and it allows for a middle ground when it comes to solar power and savings.
However, will a coal-centric Trump administration, supported by Republican majorities in the House and the Senate, leave the current solar subsidies in place? Prior to the November election the GOP’s stated energy policy included the following, "We support the development of all forms of energy that are marketable in a free economy without subsidies, including coal, oil, natural gas, nuclear power and hydropower."
The only way to determine whether you should invest in a rooftop solar array now, or wait until later, is to step back and take a long, hard look at your situation as a homeowner. Look at your roof, and ask how much power a solar array is likely to generate. Then look at your energy bills, and ask what sort of an impact that would have on your expenses. Lastly, though, you need to look at your finances to see what is feasible, and what isn't. Talk to several rooftop solar installation companies, and ask what they can do to work with you, and examine what the write-offs and tax deductions are in your state for rooftop solar. Only once you have a clear picture of all those things can you decide whether you'd be better off installing solar power now, or holding off until the conditions are more favorable.