Roofing Shingles Prices are Going Down!
A big Roofing Materials Corporation has decided to drop prices for its popular line of Asphalt shingles by as much as 40% due to a significant decrease in the price of crude oil.
As of today WTI is under $48 / barrel and Brent is just around $55 / barrel.
Because petroleum byproducts are the main and most expensive component in manufacturing asphalt shingles, the company can afford to decrease the cost to consumer, while still making good profit margins.
Why is This Happening?
This move is seen by analysts as a big push by the company for complete market dominance. Right now this company controls 65-70% of the residential shingles market and is expecting to increase its market share to 90%.
However, other roofing manufacturers are expected to follow suit, to keep up with the industry leader. As we reported before, roofing prices have been going up steadily for years, even when oil prices went down.
Many industry veterans also see this move by the company as a way to improve its corporate image and to show that they care about its customers. Dropping prices signals the company’s understanding that in tough economic times many households have to hold off on large expenditures, such as roof replacement, and encourages those who could not afford a new roof before, to move forward with their project.
This is great news for every homeowner whose roof was damaged by this winter’s ice dams, and now needs complete replacement. Expect our Roofing Price Index, which tracks residential roof replacement costs, to reflect this massive drop in the near future.
Solar Panels on Every Roof (SPER)
Yesterday (3/31/2015) the Obama administration announced a new federal program that will mandate every suitable residential roof to have a Solar PV system installed on it by 2025.
This program will create a special federal PV assistance fund and will allocate $30 billion every year for the next 10 years to provide federal assistance to homeowners with installing new solar PV panels. It is expected that out of 76 million single family homes in the US, at least 30% are suitable for installing a PV system on their roofs.
$30 billion / year will cover costs for 2.2 million homes each year to receive at least a 4KW solar system, which is enough to power most residential homes. These costs are calculated based on $3.41 per Watt for traditional panels on mounting rack solar PV installations.
Obama’s Solar Panels on Every Roof Program
Funding for this program will come directly from electric utilities companies, which have been increasing electricity rates across the US by an average of 25% in 2014. In Massachusetts, the electric rate went up as much as 37% last year. The Obama administration spokesman said that the US government does not want to see big utilities profiting off American people. Instead, they will force utilities companies to increase commercial rates, and bring residential rates down to no more that $0.11 per KWH, including delivery charges.
This unprecedented move on the part of the Obama administration is aimed at restoring the American middle class and at providing upward mobility potential for the lower class.
Another notable aspect of this new program requires General Electric (which paid zero federal taxes in 2014) to provide a free 5KW power inverter for every solar PV system installed with funding through the SPER program. Inverters are devices that convert DC power from PV panels into 110V AC power that is used in the electric grid.
The US Congress and Senate are expected to pass this bill with little resistance from the Republican majority, which is garnering public support in preparation of 2016 elections.
Metal Roofing to Become More Affordable
After news about roof manufacturers slashing shingles prices broke out, a consortium of Metal Roof manufacturers has decided that they need to stay competitive with the asphalt shingles, and plans to bring to market a new metal roof system that will cost on par with current shingles’ prices. The goal is to bring down total installation cost to under $4 / sq. ft. Currently metal roofs cost about $8.50 per square foot for architectural standing seam and metal shingles.
It is reported that metal roof manufacturers are working with US steel producers and with Alcoa (world’s biggest aluminum maker) to create new materials that will require less metal to be used in making the panels to make them more affordable. Today, typical gauge for steel panels is 26 GA (.018″ equivalent) and .032″ for aluminum panels.
The Metal Roofing consortium plans to make new materials that are 31 GA (.010″ equivalent) for steel and .017 for aluminum panels.
To preserve structural stability and wind uplift ratings, the width of the new metal roof panels will shrink from typical 16″ down to 8″, so each roof will have twice as many seams on it.
Roofing contractors are already lining up to be certified for this program, to increase their sales.
We will update our roofing calculator tool to reflect these new lower material and installation costs, as contractors start bringing down their prices.
Happy 4-1!!!
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For over 20 years Leo has run a successful roofing business in New England, specializing in metal roofing, as well as cool flat roofing technologies. Having replaced and installed hundreds of roofs in New England, Leo has first hand experience with pretty much every residential roofing material and roofing manufacturer available in the US.
The roofing companies which were making shingles are going down on sales, as the trend towards solar panels is increasing and they will soon replace the general roof shingles available in the market.