Why Are Solar Panels So Expensive?

Tim Hamlin
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Solar Energy

If you were to look at solar energy from 30,000 feet you have to be something pretty extraordinary to compete with it. Fossil fuels and nuclear energy have a lot of advantages over the sun. Even with the recent advances in solar technology, it's going to be a few decades before it comes close to competing with the low cost of those other forms of energy. So what are solar panels made out of that make them so expensive?

The basic function of a solar cell is to convert light energy into electricity. A solar panel is made up of many solar cells, which are held together into a large block.

Each of these cells requires a substrate, or a special type of glass-like material. This material is made from things like silicon, which is a very prevalent element on Earth.

On top of the substrate, you put a coating of either metal oxide, which is a mixture of oxygen and some other element, or solar movies that absorb certain kinds of light wavelengths.

The glass and the metal oxide or solar film are then covered with a protective sheet of glass or plastic. This is what people usually think of when they think about solar panels. The glass protects the solar cell, and the metal oxide or films absorb light.

Solar energy is something worth investing in because we will need some way to get energy after the fossil fuels are gone. But don't expect solar energy to be cheap in the near future.

Average Electricity Consumption for Residential Purposes

While most people are concerned about the total cost of solar panels, when the total cost of solar is factored in, purchasing solar panels is likely cheaper than purchasing electricity from the utility company. Regardless of the total cost of solar panels, one of the largest factors in the decision to choose solar is determining whether the panels are worth the initial investment.

Before your initial investment, consider the typical electrical consumption for residential purposes. The average residential home produces around 1,000 kWh of energy each month or 10 kWh of energy each day. The size of the home is not indicative of the amount of energy they produce.

The amount of energy produced is directly affected by the number of people living in the home, the number of electrical devices they have in the home and the operating schedule (consumption) of these lights and appliances.

The largest variable in the equation is the number of people living in the home. If you live in a two person home, you may only use 2,000 kWh of energy per year or less. If you live in a four person home, you could consume four times that amount.

It’s unfair to consider the size of your home when guessing the amount of energy you use. A better indicator is the number of electrical devices in your home.

Main Components of a Photovoltaic System

Solar panels are the devices that capture the sun's energy and turn it into electricity. They are often deployed as flat panels or as flexible panels that can be wrapped around a variety of surfaces.

The price of solar panels, like other types of renewable energy, is often a sticking point for many people, especially for homeowners.

However, when you look at the whole solar panel system, you can see that the price of the equipment is a small upfront investment compared to the long-term benefits. Here's some information about the main parts of a typical solar panel system.

Here are the main parts of a solar panel system:

Solar panels

There's no way around the fact that the single most expensive part of a solar panel system is the solar panels themselves. They are often made from multiple solar cell units. Each solar cell has a certain efficiency rating. The efficiency rating, in turn, affects the total cost of your system.


Electricity intended for use on-site needs to be run from the solar panels to the house. This is especially important if your house isn't equipped with solar electricity panels onsite. These wire costs can add up if you need to install a lot of wiring.

Solar PV Panels

A Cracking Investment?

The Financial Times has recently revealed that installing solar panels is the cheapest source of electricity available for households in the UK. Yet a project carried out by the Solar Trade Association has shown that many people are put off by the high initial cost of installing the panels.

Solar panels have had a dramatic fall in price in recent years. The drop in price is largely due to cutting-edge manufacturing techniques that have allowed manufacturers to produce panels at a lower cost than ever before. However, according to the FT, the most important reason for the falling prices is the massive increase in global demand for solar panels.

Many governments around the world are offering financial incentives to get businesses and households to install solar panels. The price of solar panels is a one off expense that can last for as long as 30 years … which makes it a very attractive investment for any household with a long-term view of the costs involved.

Installing solar panels has become a rather fashionable thing to do in the UK … and this trend looks set to continue. It’s likely that Gordon Brown will continue to push for further incentives in the next few years that will make solar panels more appealing to the mass market.


The most important things to look for in an inverter are the input and output wattage—and the size of the inverter. Many inverters are sold in sizes between 300 and 2000 watts, but you need to choose an inverter whose power output is big enough to accommodate your future needs.

For the input wattage, you need to know the estimated power requirement of your appliances before you purchase your inverter. Think about what type of appliances you will be using the inverter for (think appliance wattage) and then determine the total estimated wattage.

A properly sized inverter will give you enough power to run standard home appliances in the event of a power outage.

You don’t want an inverter that is too big because it will be overkill and will cost you more money. You also don’t want an inverter that is too small. That would limit the number of appliances you are able to operate. Also, you will want to have enough power left over to operate your refrigerator in the event the power goes out. This way you can keep your food cold and prevent any damage.

Battery Banks

If you're using your solar panels to charge a battery bank that isn't integrated into the solar panel itself, then you are losing efficiency in the conversion process. Without being able to take advantage of DC-DC converters, you are using a 12v solar panel to charge a 12v battery. So, you're achieving only 75% efficiency in this situation.

If you connect a 12v solar panel to a 24v battery bank, then you can achieve up to 80% efficiency. So, if you use a 12v solar panel to charge a 12v battery bank, then you should be fine with a 100 watt solar panel, but remember that you'll need to have a large battery bank to store the power generated by the 100 watt solar panel.

Now let's say you're just using a 48v battery bank. A 48v solar panel is more efficient than a similar 12v solar panel because they have the ability to take advantage of DC-DC converter technology to achieve more than 80% efficiency. You also don't need to carry around so much extra weight by putting two 12v solar panels on the same frame.

The physical size of 48v solar panels are also usually smaller than the physical size a pair of 12v solar panels. This becomes quite noticeable if your installing your solar panels on a moving vehicle such as an RV.

Charge Regulators

You can buy a solar panel from a supplier for a few hundred U.S. dollars, but a properly functioning solar powered system with an inverter will cost several thousand U.S. dollars. The panels themselves are inexpensive. There are several factors that contribute to their final price.

The most costly component is the battery, but keep in mind that you will not be using the battery without the solar panel. The cost of your battery is dependent on a number of factors (for example the product warranties and energy storage capacity) that have nothing to do with the solar panel.

Next up is the charge controller. In this context, a charge control device converts the power in a solar panel into a form that can be easily transferred and stored. It also regulates the amount of charge that is transferred from the solar panel to the battery in order to protect it from being overcharged.

Typical charge controllers have a built-in monitoring system that will cause the controller to disconnect from the panel if it overcharges the battery. In most cases the battery will be ruined if you allow it to run too long on overcharge. If the battery is ruined, you will have to purchase a new one.

Other Components & Their Cost

When buying solar panels, you have to think about the rest of the components you need. You will also have to pay for installation.

What you usually buy is the solar panel, which is really just a sandwich of different materials that has a transparent top.

The solar panel doesn’t generate electricity by itself. That technology is still being researched and hasn’t been put into practice yet. The sunlight falling on the solar panel generates energy that goes to the inverter, which converts it to AC electricity and sends it to the grid.

This electricity feeds into your home and that is how the panels work.

The installation means hiring someone to install the panels. Solar panels are very heavy and require special mounting points.

This is why you also have to pay for the labor.

You also have to pay back your municipality if you want to put the panels on the roof of your building.

Final Thoughts

Solar energy is very promising and holds the potential to help us solve many of our problems in the future, such as finding an alternative source of energy and eventually reducing our harmful impact on the environment.

The main downside of solar panels is the cost of purchasing the panels and setting them up initially. The good news is that, with the help of these tips, you can be prepared to take a small step towards a cleaner and brighter future.

The earlier you act and the more solar panels you own, the bigger your savings will be. Hopefully, this guide will help you provide you with a good plan of action to start implementing today.

The advice in this article is for informational purposes only. This information is not intended to diagnose or treat any disease or injury and not to replace the advice of a health professional. You should not permanently rely on this information to prevent or treat health problems and should seek professional medical advice whenever possible.