In the last two years solar panel prices have dropped dramatically – from nearly 15.000 pounds for a 4kWp system towards 5.0000 pounds. But how are prices expected to develop in the future? The clean-tech advisory firm Clean Edge has developed a 10 year price forecast in US dollars, and based on this we can forecast prices in the UK as well.
Based on their forecast price-curve, the price per Wp in USD is due to decline from $2.33 in 2013 towards $1.07 in 2022. At the moment the best price in the UK is around 5.000 pounds for a 4kWp system, which equals £1.25 per Wp. Adding a similar decline as the expected USD decline would result in a price of £0.57 per Wp in 2022, as shown in the following graph:
What does this mean for the actual price paid for a 4kWp solar panel system in the UK? Should I buy now or wait for later? The price curve shows that the price for 4kWp of solar panels is expected to decline by half from around 5.000 pounds in 2013 towards around 2.300 pounds in 2022. But over those 10 years, you could already benefit from your solar panels. A conservative estimate of yearly earnings would be around 800 pounds per year. When we add this to the declining cost of solar panels, we get to the following graph:
As this graph shows, the best return is achieved when you buy solar panels now, rather than wait for further price drops. This is driven by the missed income from solar panels if you decide to wait for later, since you miss the opportunity of earning 800 pounds every year. And when you take into account future drops of the Feed-in-Tariff (3.5% in July) and the potential for import tariffs on Chinese panels, it becomes even more clear that buying solar panels now does provide a much better return rather than waiting for future price drops. See what you can earn with your roof, and enter you postcode in the box above.