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 leading 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.
To put this in perspective, the cost of installing a rooftop solar system on an average detached residential property* was around $9,300 in 2014. This dropped by between $600-$900 each year, until 2020, with a price of $4,550. In 2021, this price rose by $700—a cost not seen since 2018. GlobalData doesn’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.
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.
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 stabilize growth in rooftop solar installations.
In 2020, the global rooftop cumulative solar PV capacity stood at 248.8 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 340W. For a 1,200 sq ft home, nearly 10 to 12 panels are required, the lowest has been considered for the calculation.