30 Jul How price rises in solar may just be a door opener
Each January the number of STC rebates available for a solar installation are reduced. However right now, there are a number of additional market forces that will impact overall prices of solar installations.
Talking through these factors with prospects may just help green-light projects before the end of 2021.
So what’s at play and how do you explain it to prospects? There are four main market forces contributing to the rise in prices:
1. Silicon shortages and the falling dollar
Globally, the price of poly and mono silicon wafers for panels are going up due to increased demand and rumoured production issues in China . Price have risen by almost 300% in 2021. Couple this with the steady fall of the Australian Dollar and you’ve got a notable increase of the cost of a system.
2. Global PV demand increasing by 10%
Global PV demand is predicted to increase by 10% in 2021. Demand had decreased during 2020 due to the pandemic, temporarily pushing pricing down for last year, however we are likely to see a correction.
3. Installer shortages push labour costs up
COVID lockdowns have created a backlog in the installations of projects across Australia. There is a shortage of installers to complete jobs and this demand is driving an increase in labour costs.
4. STC rebate reductions
There is always a rush to claim STCs before they reduce at the end of December. However in 2021, the installer shortages and lockdowns are likely to put even more pressure on getting jobs installed in time.
When do you start talking to prospects?
Right now. More than other years, pent up market demand means that projects need to get locked in sooner to secure better pricing.
How can payment solutions help?
When prices go up, payment plans and PPAs become more important in the sales process.
On the one hand they offer a way to eliminate the upfront cost of solar projects so that customers move forward with projects sooner and before the prices rise substantially.
On the other, they also enable the organisation to spread the project cost over a number of years so the solar system is more likely to become cash flow positive.
If you are having conversations with prospects and want to discuss price rises, we can send you Solar Market Price Rises Information Flyer. We can create a co-branded version on request too.