I often meet with customers who are interested in solar, but don’t move forward for various reasons. Then they’ll call me back 5 – 6 months later and want to move forward, but then are shocked when the price went up. This year has been a rough year for solar prices, but it’s also been a rough year for Texas energy rates period. So why are solar prices going up?
Why are solar prices going up?
#1 – Federal interest rate hikes
- The Fed has raised rates 6-times this year already and they’re not done yet.
- In response, solar financing companies have also raised rates.
- My leading loan company Mosaic has raised rates 6-times this year and often will little to no heads-upAs an example, the start of 2022 we had loan options ranging from 0.99% (with dealer fees) to 4.99% (without dealer fees).
- If you want to know what a dealer fee is, please watch a video I did earlier this year on solar financing.
- Heading into the end of the year we now have loan options ranging from 2.99% with dealer fees up to 6.99% – the no dealer fee option isn’t even available.
- These interest rates have lead to higher costs and higher monthly payments.
#2 – Supply Chain issues
- Yes! Supply chain issues are not just about COVID anymore.
- We’ve had:
- Trade embargoes with foreign countries.
- Union strikes within the transportation industry.
- Issues with shipping overseas.
- All these delays lead to a there being less panels available in the U.S., which creates a Supply and Demand issue.
- As a strategy to help give them a better advantage, big National solar companies with deep pockets buy up all the solar panels available in a certain market and hoard them for themselves, leaving us smaller and local solar companies with little options in solar panels and in solar panel pricing.
#3 – Inflation
- Despite the rapid rise in inflation, the solar industry has remained pretty consistent.
- People are choosing to go solar because its one area within their budget that they can manage, mainly their cost for energy.
- As energy prices surge across the board, solar is making more financial sense.
- However, solar is not immune to inflation, so you’re seeing rising costs due to labor market price increases, materials, and fuel.
- Add to that the government stimulus and manufacturers of solar parts and components are raising their prices to offset some of these costs and to capture more capital for investment into manufacturing capacity.
What can you do about more expensive solar?
If you are in the market for solar installation companies near College Station, you can:
- Wait to see if prices go down, which I don’t believe they will.
- You decide to go solar now and capture today’s market price for your system.
- We always encourage our customers to get more than one quote to ensure that they are getting the most competitive price for their system.