Solar energy has long been utilized by humans for various purposes. Its main use today is for the generation of electricity, the cost of which has dramatically decreased since solar power first rose in popularity in the 1980s. The cost of solar energy now is more affordable than it has ever before. So, the answer to “How much does solar energy cost?” is easy: it is cheap!

This massive decrease in price is only natural seeing how much technology keeps on improving. Solar panels now cost very little but produce much more electricity—a dramatic improvement in efficiency. Also, the cost of installing a “solar system” has decreased. When solar systems were first introduced, only the upper classes of the society can afford them. Now, they are affordable even to average homeowners. The cost of residential solar energy just keeps on decreasing.

In the solar energy industry, the primary unit of price measurement used is price per Watt Peak (Wp), much like the price per barrel unit of the oil industry. High power band solar module (greater then 125 Watts) prices have dropped from $27 per Watt peak ($27/Wp) in the early 1980s to just $4 per Watt peak ($4/Wp) today. The price can increase or decrease depending on the order’s size.

Solar modules typically make up 40% to 50% of the cost of a solar system. The price varies depending on the purpose of the installation. Standalone, or off-grid, systems usually cost more than those which feed energy to grids since they have more solar modules. Also, off-grid systems have batteries that store energy to be used when there is no sunlight. Solar systems have other components that are required for them to function. These other components can also differ, therefore, also changing the price.

Residential solar systems today can cost between $8000 and $12000 per kilowatt peak (kWp) installed. This is the lowest solar energy prices have ever been. When buying a system, it is good to know all the necessary details. All of these can be assessed by a service professional. Solar systems can power many things inside the house. Buyers have to be able to calculate all the power they will need before buying anything.

There are many solar modules today whose prices are lower than the average price per watt ($4.00). The lowest recorded price of a multi-crystalline silicon solar module is $1.98. An American company retails this specific module. The lowest-priced mono-crystalline solar module is $2.70 per watt and is sold by an Asian retailer company. Still, the cheapest of all the solar modules is made of thin film. It is retailed by an Asian company for just $1.76 per watt. As a rule of thumb, thin-film modules are cheaper than the crystalline ones, provided they have the same power output.

It is important to remember, however, that not all modules are of equal performance. Brand, certifications and technical attributes, not just the price, should still be considered when buying modules. More expensive, yet high-quality, systems can prove to be better in the longer as compared to the cheaper, low-performance ones.