New research shows that the cost of installing and owning solar panels will fall even faster than expected, BBC News reported.

Some 90 percent of existing solar panels last for 30 years, instead of the predicted 20 years — which brings down the lifetime cost, according to the independent EU Energy Institute.

In fact, the panels are such a good long-term investment that banks should offer mortgages on them like they do on homes, the institute said.

The institute forecasts that solar panels would be cost-competitive with energy from the grid for half the homes in Europe by 2020 – without a subsidy. Incentive programs for solar panels in Germany, Italy and Spain have created manufacturing volume that´s bringing down costs.

Due to the recession, solar panel prices dropped 30 percent last year alone due to an increase in output and a drop in orders.

China has underpinned its solar industry with a big solar domestic program, which would keep prices falling. And there are large-scale solar plans in the U.S. and India, according to Heinz Ossenbrink, who works at the institute.

Panels had been expected to last for 20 years and price calculations were based on this (with a free energy source, purchase and installation represent almost the entire price of solar power).

The institute´s laboratory has been subjecting the cells to the sort of accelerated aging through extremes of heat, cold and humidity that has long been a benchmark for the car industry, Ossenbrink said.

These tests have shown that more than 90 percent of the panels on the market 10 years ago are capable of still performing well after 30 years of life, albeit with a slight drop in performance and Ossenbrink says 40-year panels will be on the market soon.

Grid parity — the point when it is as cheap for someone to generate power on their homes as it is to buy it from the grid –- is a key goal for solar energy efforts.

However, depending on electricity prices, it varies from country to country. But the institute estimates that Italy – which has a combination of sunny weather and relatively high electricity prices – should reach grid parity next year. It also estimates that half of Europe should be enjoying grid parity by 2020.

It could be a longer wait, however, for cloudy northern countries like the UK — possibly up to 2030. But eventually solar panels on homes would be cost-competitive without a subsidy, even in Britain.

“Basically everything (in the industry) is bound to grow still further. Growing further means less cost. Less cost means grid parity,” Ossenbrink said.

He said over the past five years they had been surprised at the drop in prices due to good incentive programs first in Germany then Spain and Italy.

“That created a kind of a boom that was helping industry to reduce costs and get into profitability. And when an industry is in profit it drives on its own,” he said.

Meanwhile, the industry has even greater ambitions, according to Professor Wim Sinke from Utrecht University in the Netherlands, who leads the solar umbrella group the European Photovoltaic Technology Platform.

“The target of the sector as a whole is to reach grid parity in almost all of Europe over the next 10 years. So by 2020 we should have grid parity in most of Europe,” he told BBC News.

He said that several key sticking points for domestic solar would be the lack of flexibility in electricity grids to take in surplus generated energy and difficulties with finance.

“What I would like to see is the finance sector saying solar power is a product like financing a house – except they can predict the value of the solar panel much more safely than they can predict the value of the house in a volatile market,” Ossenbrink said.

He believes that electricity will never be given away free and that banks should offer mortgages on people's solar panels like they do on homes.

“The bank should own the panel, then it would transfer to the householder when the loan has been paid off. It would be perfect for life assurances.”

But the institute says it will take much longe

via Solar Panel Costs Are Set To Drop – Science News – redOrbit.