Rooftop solar installation price rise only temporary, says GlobalData

Source: press release, 16 February 2022

Cost of rooftop solar for typical residential home (USD) (source: GlobalData, Oil & Gas Intelligence Center)
Cost of rooftop solar for typical residential home (USD) (source: GlobalData, Oil & Gas Intelligence Center)

Those striving to improve their carbon footprint by installing rooftop solar panels during the pandemic missed out on what has been over a decade-long annual price drop, according to GlobalData. The data and analytics company found that the price of panel systems dropped every year between 2013 and 2020, after which COVID-19-related supply chain disruption abruptly stopped this trend.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, says, “To put this in perspective, the cost of installing a rooftop solar system on an average detached residential property* was around USD 9,300 in 2014. This dropped by between USD 600-USD 900 each year, until 2020, with a price of USD 4,550. In 2021, this price rose by USD 700—a cost not seen since 2018. We don’t expect these costs to go back down now until 2023.”

GlobalData’s latest report, Rooftop Solar Photovoltaic (PV) Market, 2021 – Global Market Size, Market Share, Major Trends, and Key Country Analysis to 2030, reveals that the trend that saw rooftop solar prices decrease between 2013 and 2020 came about because of an increase in the supply of solar cells and modules. Therefore, logistics constraints caused by the COVID-19 pandemic led to a rise in the price of raw materials and a sharp increase in solar PV system prices in 2021.

Saibasan continues, “The delay in shipments, combined with a lack of availability of workforce, caused a major hindrance in the value chain. Cost is expected to moderately increase in 2022, before declining gradually between 2023 and 2030 thanks to advancements in technology, the reduction of component posts, and the increasing scale of production. Some countries have provided temporary relief in the form of incentives and rebates to overcome the pandemic’s challenges.”

A third of global rooftop solar cumulative capacity was installed in residential areas in 2020, with the rest present in the commercial and industrial (C&I) segment.

Saibasan adds, “The transition of both residential and C&I consumers to ‘prosumers’ – someone that both produces and uses their own electricity – is increasing due to the adoption of solar panels within building materials, and a preference for small-scale solar in smart cities and microgrids. These are expected to stabilise growth in rooftop solar installations.”

In 2020, the global rooftop cumulative solar PV capacity stood at 248.8 gigawatts (GW), which showed an increase of 23.8% compared to 2019. The Asia-Pacific region accounted for 53.5% of the market share – with China alone accounting for 12.4% of the global market. Europe, and North & South America (NA&SA) accounted for a respective 29.1% and 13.6%. Governments in the region are promoting rooftop solar PV installations through various long-term policies, financial incentives, subsidies, and tax benefits.

* The common residential rooftop panels used are 340 W. For a 1,200 square foot home, nearly 10 to 12 panels are required, the lowest has been considered for the calculation.