What Is the Cost of a Solar Panel?

Solar panels for home use have been around for nearly 30 years, yet they're still not considered to be affordable for most homeowners.

How Do Solar Panels Work?

Lower costs of solar panel production could make photovoltaic systems more attractive for homeowners.Lower costs of solar panel production could make photovoltaic systems more attractive for homeowners.
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According to the U.S. Department of Energy Energy Saver site (see Resources section), solar electric---or photovoltaic---systems convert sunlight into electricity. When sunlight is absorbed by the semiconductor materials that make up a solar panel, electrons are knocked loose from their atoms. This is called the "photoelectric effect." The free electrons travel into a circuit built into the solar cell and produce an electric current. The basic solar cell produces very small amounts of power, so many cells are interconnected to form the solar panel. These panels are then linked to create roof-mounted or rack-mounted solar arrays.

Size Matters

The cost of a solar panel is related directly to how many individual photovoltaic cells it contains, which in turn determines how much power in watts an individual solar panel can produce when struck by the sun's rays. The cost is often expressed in "dollars per watt." As examples, a 100-watt panel produced by DuPont was selling through an online distributor in June 2010 for $120, or $1.20 per watt. A Kyocera 210-watt panel was selling for $511, or $2.43 per watt. These prices were for the purchase of one panel. During the same period, a pallet of 30 Schott 225-watt panels was $17,375, or a cost of about $2.57 per watt.

How Are Solar Panels Made?

Silicon is fashioned into a crystal called an "ingot." This crystalline ingot is then cut into tiny discs, or wafers, less than a centimeter thick. After polishing, materials that produce an electrical charge in a semiconductor, called "dopants," are spread across the disk. This creates positive and negative poles, just as in a battery. Each wafer is wired with very thin threads and becomes an individual solar cell. The cells are aligned in a grid-like matrix and sealed behind a protective high-impact glass covering.

Why Do Panels Cost So Much?

The process of making a solar panel is extremely time intensive. The micro-miniature wiring that connects the individual cells has represented a major challenge in making photovoltaic panels inexpensive enough for mass adoption. Advances are being made in the methods that are used to wire the individual cells together into a functioning solar panel, but true mass production is still in the future. Also, in recent years there has been a shortage of the silicon required for producing the cells, which has kept panel costs high.

Will the Costs of Panels Come Down?

According to Travis Bradford, president of the Prometheus Institute, supplies of solar-cell-grade silicon should begin increasing in 2010 and quadruple by 2012, which will help dramatically lower the costs of solar panel production. Bradford also predicts that continuing developments in the newer thin-film technology will further reduce the costs of production. The thin-film manufacturers don't use silicon in their processes, but Bradford suggests that they will need to drop their prices to compete with the lowered prices of the conventionally-produced solar panels. Another cost-cutting factor to keep an eye on is the growing number of rebates and tax initiatives being offered by the federal, state and local governments for installing solar panels to reduce dependence on electricity provided by coal-fired and natural-gas driven turbines.

About the Author

Based in central Oregon, Gary MacFadden started writing in 1972 as a "stringer" for several Montana newspapers. He has written six books about bicycle touring and has been published in "Outside," "Wilderness Camping," "Adventure Cyclist" and other publications. MacFadden holds a Bachelor of Arts in journalism from the University of Montana.