According to an industry report, the cost of residential solar systems continued to rise in the first half of 2023, but the pace of growth has begun to slow.
EnergySage, a market leader in solar equipment, has released a market intelligence report outlining how rising interest rates and inflation have affected the residential solar market.
The report is based on millions of sales transactions made by homeowners on EnergySage.com over a 12-month period for solar panels, inverters, batteries and more from solar companies in 41 states and Washington, D.C.
The report shows that solar equipment prices have increased on the EnergySage marketplace over the past two years, but began to slow in the first half of this year, increasing just 1.8%. In the first two months of the third quarter, prices even began to fall.
However, financing costs have not decreased. Between the second half of 2022 and the first half of 2023, the top-rated solar loan on the EnergySage market went from 1.99% for a 25-year loan to 3.99% for a loan of the same term. However, the monthly payment on a $30,000 loan is only $30 more.
"Between the changing net metering landscape in California earlier in the year and the slowdown in overall consumer demand that hit the solar industry this summer, 2023 has been a turbulent year so far," said Vikram Agarwal, CEO and founder of EnergySage. . “During this unique time for the solar industry, EnergySage's market activity and trend analysis revealed in this report provide a unique perspective on the state of the industry from the installer, customer and homeowner perspective.
Tax credits can help
Despite the high cost of solar installation, there are still several tax advantages that can make such installation cost-effective and speed up payback time.
The Federal Residential Solar Credit is a tax credit that can be deducted from federal income taxes as a percentage of the cost taxpayers pay for a solar photovoltaic system. The tax credit is a valuable tax credit because $1 of the tax credit can be deducted from the amount of income tax paid.
Congress recently approved an expansion of the tax credit and increased the percentage of expenses eligible for the credit to 30%. The taxpayer must install the system in their home and complete the installation within the tax year.
How quickly the system pays for itself depends on how much you're paying for electricity at the time and the costs, which vary from state to state. Equipment and installation costs also vary by state. ConsumerAffair breaks it down here.
