Why is now the best time to buy solar panels?

Interest rates have risen, construction is slowing, and electricity prices have fallen. However, we strongly believe that now is the best time to buy solar panels. Perhaps better than ever. Let’s justify this claim.

Panels are at record low prices

The biggest single reason why purchasing panels is more profitable than ever is that panel prices are now at an unprecedented low. This is the sum of several reasons and we believe that a similar situation will not be repeated in the coming years.

This is a chain reaction caused by last year’s energy crisis, where demand exploded and the availability of goods was poor as factories were unable to meet global demand and the logistics coming through Russia were understandably in disarray. For this reason, factories increased their production enormously. Logistics from Asia to Europe by sea takes its own time, so the avalanche of goods only started to appear on the market with a delay.

At the same time, interest rates began to rise, market uncertainty increased, and investments in energy infrastructure, combined with spring windiness and the high level of hydropower reservoirs in the Nordic countries, pushed the price of electricity on the exchange to a record low, even below freezing. Consumer demand for panels collapsed.

Now, retailers in Finland have warehouses full of goods. Some of the retailers purchase their goods from European retailers, who pressure the retailers to empty their warehouses. Manufacturers, in turn, pressure European retailers to purchase their empty warehouses.

In other words, we are currently in a temporary situation where we want to clear the stock and many of the panels are even being sold with the skins on so that the technology in the stocks does not become obsolete. Once this stock is cleared, we expect the price level to return to its previous level.

Are the older technology panels in stock bad? Absolutely not! Manufacturers just want to make room for the upcoming N-Type panels and want to get rid of the P-Type panels currently in stock. Read more about panel technologies in our article.

For example, a 22-panel system of HT-SAAE 400W all-black glass-glass panels is now €3,254 cheaper than it was back in the spring. I’ve never seen glass-glass panels this cheap.

HT-SAAE 400W all-black glass-glass panels installed on the roof of a detached house.

Electricity is still expensive

Although we are no longer talking about the prices of over €1/kWh during the energy crisis, the price of electricity, and especially the transmission price, is high.

On September 19, 2023, for example, the price of electricity with the Fortum Tarkka exchange-traded electricity contract is €9.13 + basic fee €4.5.

The electricity transmission price forms a very large part of the whole, for example Caruna Oy (single-family house, room-specific electric heating, main fuse 3×25 A, electricity consumption 18,000 kWh/year on June 1, 2023) costs 9.01 cents/kWh for transmission.

In other words, the total price of electricity in this situation is 18.14 cents / kWh .

The price of electricity transmission has been rising all the time. It must be remembered that, for example, as electric car charging becomes more common, there are billions of euros of pressure on the electricity grid to reform, which will certainly increase transmission prices in the future.

Panels are profitable despite high interest rates

For example, a system of 20 Canadian Solar 410W panels on a south-facing 30-degree roof in Southwest Finland produces 7,650 kWh per year according to the modeling program. At the current offer prices, the package will cost €6,100 after the household deduction.

Using the price example in the previous paragraph, the annual savings of the power plant (assuming that a large part goes to its own consumption) is up to €1,387.71.

If the panels are purchased with OP financing, which currently has a 6-month interest-free and fee-free payment period for systems purchased between September 1 and November 30, for example, with a 6-year payment period, the monthly installment will be €102 according to the calculator. Therefore, €1,224 per year.

In other words, with these parameters the power plant is cash flow positive, no equity is tied up in it and the payments are paid off in 6 years. As soon as the system is viewed over a slightly longer time frame, it becomes clear that the acquisition is truly profitable. For example, at 10 years the cumulative cash flow is almost €7,900 in profit and at 15 years the profit is almost €15,000. Pretty good for a fully leveraged investment!

Judging by the news about interest rates, the peak has been reached and the decline in interest rates in the coming years will make the acquisition even more profitable than it is at the moment.

Electric car charging is becoming more common

In addition to the fact that panels are now exceptionally cheap, the increasing use of home charging for electric cars significantly increases the number of applications for solar electricity. Charging can usually be easily scheduled for sunny hours, and some chargers can be configured to charge in the sun. For example, in Beny charging stations, if the charging station can be installed in the same main electricity center with solar panels, it is possible to install a so-called Solar Dynamic Load Balancer, which, as the name suggests, sets the charging to operate on solar electricity.

With the best adjustment in either way, the buyer of the panels can enjoy free kilometers driven on self-generated electricity.

Summary

In summary, it can be said that the purchase of panels is more profitable than ever due to the exceptional oversupply of goods. In addition to the reasons mentioned above, it is also worth remembering that panels increase the value of the property, reduce greenhouse emissions and reduce the need for large power plant investments.