The end of ever dropping residential solar prices?

The UK residential solar market seems have stabilised in terms of pricing: at the start of this year a 4kwp (16 panel) system could cost as little as £5,000 or as much as £7,500; currently a price range of around £5,500 to £6,500 is the norm in the market.

Caused by the minimum price for Chinese panels, this smaller price range combines with a trend away from cheap Chinese panels to ‘higher quality’ European and Japanese brands. This appears to be the end of a race towards ever-falling prices and allows installers to focus their selling on quality rather than quantity of materials, service and warranty.

In order to thoroughly update our installers' profiles and prices for solar comparison site, CompareMySolar, I’ve spoken to over 50 installers in the last week. After all their prices have been updated, a clear price curve for 4kwp systems in the UK appears (see the graph below).

It shows most installers are currently offering their best price for a 4kwp system at between £5,500 and £6,500. Previously there was a segment of the market offering rock-bottom-prices as low as £5,000, but the minimum price set by the EU on Chinese panels has either forced these companies to go out of business or pushed up their pricing.

Graph to show CompareMySolar information

Product-wise, most installers are picking ‘higher quality’ panels. These are either characterised by a more reliable brand (e.g. a large solar-PV company or a diversified electronics firm) or by product characteristics (all-black panels, higher Wp panels). Examples are the Yingli 275wp, LG 285wp or BenQ 325wp panels.

Systems costing less than £6,000 tend to be more likely to still use smaller Chinese brands, whereas those above £6,000 are more likely to use larger brands. We see a shift with many installers towards the use of European (e.g. Axitec, Bosch, Solarworld) or non-Chinese Asian manufacturers (e.g. LG, Hyundai), driven by consumer demand and the reduction of price difference with Chinese manufacturers.

A more mature market for residential solar seems to be appearing with stability in pricing and feed-in-tariffs. Over the past year many installers have also left the residential solar PV market or diversified into commercial solar or other renewable energies, which leaves a smaller installer base to focus on consumer demand. Compared to a year ago, those installers that remain focused on residential solar PV are certainly more positive, and relieved that site surveys can once again be about quality of materials, service and warranty rather than ever lower prices.