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What effects the cost and payback of a solar system?

The cost and payback of a solar power system is dependent on a number of factors:

a. The cost of manufacturing panels,
b. The international availability of silicon,
c. The cost of inverters,
d. The installation cost,
e. Availability of product,
f. Quality of the components
g. The fluctuating international currency and
h. Federal and state rebates (if any) available towards the cost of the system
i. The cost of electricity and feed in tariff rates

The economies of scale in the manufacturing of components together with the above factors impact the final cost and payback to the consumer.

Over the past years Government solar rebates have decreased, while the price of solar panels and inverters has also reduced as manufacturing volumes increased and economic of scale benefits are passed on. For example in 2008 a panel costs around $6 per watt = $1500 for a 250W panel, while the same panel in early 2013 would have cost about $250 per watt.

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