Electrical wire is an important component for any type of electrical work.
Whether you want to bring electricity to a new room or an outdoor hot tub, you’re going to need electrical wiring.
The average cost of the electrical wire ranges from as low as $1 to over $200.
Considering that electrical wire can become quite expensive, you may wonder what’s driving the price increase.
Why Is Electrical Wire So Expensive? (Top 10 Reasons)
1. Copper Price Increases
One of the reasons that electrical wiring has become expensive is the rise in the price of copper.
Copper is an integral part of electrical wiring.
Since it’s a relatively safe conductor, copper is a preferred material when making electrical wiring.
It doesn’t heat as well as other types of metal which means there is a smaller chance of an electrical fire occurring.
It also means the metal is less likely to become deformed through metal heating.
The problem with copper is that its price has been increasing steadily since 2020.
In that year, copper saw an increase in price by 22%.
Experts at Goldman Sachs believed then that the price of copper would continue to rise into 2021 and 2022.
Since the price of copper has increased, anything that contains copper is also going to be more expensive.
That’s because manufacturers take on more costs to make their products.
If they’re paying more for copper, then their customers are going to pay more for their products.
That includes anything from plumping pipes to electrical wiring.
Since manufacturers take on a lot of copper to make their products, they also spend a lot of money.
That cost gets passed onto their customers.
In addition, there’s a lot of demand for copper which is causing its increase in price.
During certain parts of the year, when the weather is more favorable, more construction projects are occurring.
Homeowners, businesses, and everyone in between are rewiring houses, performing improvements, or replacing their plumbing.
Since there’s more demand for copper, the price increases further.
As a result, all copper products also become more expensive.
Electric wiring is expensive because the price of copper has increased.
2. Silver Price Increases
Copper isn’t the only precious metal that is attracting the attention of the experts at Goldman Sachs.
They also believe that the price of silver is going to increase in 2022.
Back in 2020, silver had seen its highest price since 2013 at $30 an ounce.
There are a few reasons the price of silver has gone up and impacted certain products like electrical wiring.
One of the primary reasons is the focus on certain renewable energy projects.
The United States government has two projects in mind for making the country follow a renewable energy path.
The first is an increase in solar panels.
Silver is an important part of solar panel production.
The other project is to extend 5G internet across the country.
This production also requires the use of silver.
Since both these projects are widescale, they’re going to need a lot of silver.
This impacts the price of silver because supply is low at the moment.
Peru and Mexico are two of the biggest silver suppliers on the market.
Both their mines and ore processing factories have faced struggles in reopening following the COVID-19 pandemic.
Both had to close frequently whenever an outbreak occurred to stop the spread.
Without a reliable supply of silver, manufacturers have had to outbid one another for the small supply that remains.
This means that the value of silver has increased.
Since manufacturers have to pay more for the material, their products become more expensive.
Silver doesn’t make up electrical wiring as much as copper, but it plays an important role in being a plate copper conductor in certain situations where there are a lot of high temperatures occurring.
As such, silver is important for industrial applications.
With more demand for the material and low supply, the price has increased.
Electrical wiring is expensive because silver is expensive.
3. Resin Price Increases
Metal isn’t the only thing that’s increasing in price either.
Plastic resin is also increasing in price.
Resin plays an important in electrical wiring.
It helps join and repair cables as well as replaces cable jackets.
In particular, the resin coats the jacket that protects the vulnerable wiring within it.
One of the ways that it protects the wiring is by providing a moisture barrier.
Everyone knows that water and electricity shouldn’t mix.
Water is extremely conductive.
If electricity enters a water stream, then the current of electricity can travel for a long distance.
Even small moisture droplets can cause serious damage to electrical wiring.
It can cause the wiring to short out, spark, or even catch fire.
The resin protects electrical wiring by keeping any moisture separated from the actual wiring.
It also helps insulate the wires.
Since it’s an important part of wiring longevity and safety, many electrical wire manufacturers use resin in their products.
Unfortunately, this is also making the price of electrical wiring higher.
That’s because the resin has slowly been increasing in price due to several factors.
The first is because of the oil supply problems the world is experiencing.
Resin is a plastic that comes from oil production.
With factories and refineries shut down due to the pandemic, there wasn’t that much production of resin going on.
Furthermore, when lockdowns occurred, there was even less demand for oil.
As a result, the production of resin also decreased.
Then there was a problem with transportation when a container shortage occurred.
Exporters were unable to ship out as much resin as they would have liked since there were fewer containers available.
This meant that the supply of resin was incredibly low.
With low supply but high demand, as is the case during certain parts of the year, the price of resin became high.
This problem continues to this day.
Electrical wiring is expensive because the price of resin is high.
4. Packaging Material Costs
Electrical wiring requires special packaging in some cases.
Manufacturers can’t risk their products becoming damaged if they’re exposed to water or other elements.
To avoid that, they often package their wiring in materials like plywood, other wood products, and corrugated cardboard.
The problem with these packaging materials is that they’ve all had price increases over the past few years.
There are a few reasons influencing the higher prices.
The primary one is the COVID-19 pandemic and how it impacted labor and supply chains.
Many lumber and logging companies had to scale back their production during the pandemic.
Some were even forced to shut down since they weren’t deemed essential.
This meant that all wooden and paper products had a very low supply for a few months.
Factories also had to shut down.
Some even had to lay off workers to cut costs.
When the lockdowns ended, there was a sudden demand for their typical products.
However, without their full workforce, logging companies, lumber mills, and factories were unable to meet demand.
With low supply, this meant that prices for paper and wood products increased.
Almost everyone likely remembers the toilet paper shortage during the pandemic.
Other products like cardboard and plywood were also in short supply.
Plywood, in particular, was also facing a unique shortage because of the increase in home improvement projects.
Since people were stuck at home and had extra cash from the government, they put it towards home improvements.
That meant a lot of homeowners were buying and using plywood.
This led to even more of a shortage of material.
Finally, with an increase in online shopping over in-person shopping, businesses needed more cardboard than ever.
Cardboard remains the primary material used for packaging boxes.
With demand high, supply started to dwindle.
It became expensive to buy the material for packaging needs.
All these increases have impacted the price of electrical wiring because it costs manufacturers more to package their wiring products.
Electrical wiring is expensive because of the cost of packaging materials.
5. Transportation Costs
Another problem that’s leading to increased prices of electrical wiring is transportation costs.
Electrical wire manufacturers face several transportation costs.
They first have to pay for shipments of raw materials to their factories.
Even if someone else has their trucks and drivers send the materials to the factories, the manufacturers are going to pay for those services in terms of shipping fees.
Then they need to take those raw materials and pass them through their factories.
There might be a few other shorter kinds of transport that occur during this stage if certain products need to go from one factory to the next.
Finally, when the product is ready for suppliers, they transport them to their buyers.
The problem with transportation and logistics is that they’ve become expensive.
One of the reasons is the lack of drivers.
During the COVID-19 pandemic, many fleets had to reduce the number of drivers they had since there weren’t many goods that needed transporting.
When the lockdowns ended faster than anyone expected, the same companies found themselves with a sudden need for truck drivers.
However, drivers realized they had some power in refusing to return for the same pay and treatment that they had been receiving.
Most wanted higher pay for the type of work that they do.
This has created a labor shortage in the transport and logistics industry.
With fewer drivers, it means fewer goods are shipping out across the country.
This impacts manufacturers making electrical wiring because it bottlenecks them.
They’re only able to send out as many products as they can, based on how many drivers they can find.
Since fewer products are arriving at stores, and with demand about the same, if not higher, the prices increase.
There’s a low supply for moderate-to-high demand.
There was also a problem with shipping containers.
The pandemic put a lot of strain on the supply chain, especially when it came to overseas shipping and ports.
An increase in online shopping exacerbated the problem.
Manufacturers found themselves with fewer containers than they needed.
With new containers small in number, a bidding war ensued to rent or buy other containers.
This also added to the cost of producing electrical wire.
All these price increases and supply problems have impacted the price of electrical wiring.
It’s expensive due to the higher costs of transport and logistics.
6. Wire Spool Size
One factor that impacts the price of electrical wiring is the spool size.
You’ll find several different lengths of wiring at different suppliers.
The longer the wiring is, the more expensive it is.
For example, some of the most expensive electrical wiring spools have a length of over 1,000 feet.
This allows the electrician or general contractor to wire a good amount of a room, if not a smaller house, from a single spool.
However, it’s expensive because the manufacturer used more materials to make it.
It costs more money to make a 1,000-foot electrical wire than it does a 500-foot electrical wire.
To cover those costs, the manufacturer has to put a higher price tag on it.
If prices on materials are increasing, then high-cost products are going to have high prices.
Electrical wiring is expensive because of its length and how it impacts the cost of production.
7. Labor Costs
Material costs aren’t the only thing impacting the price of electrical wiring.
Labor costs have also increased.
Coming out of the COVID-19 pandemic, workers generally pushed for higher wages.
The cost of living in many places has far exceeded what their wages can cover.
To survive and actually make a living, workers demanded higher pay or simply quit.
This type of labor shortage has impacted several industries besides manufacturing.
To keep their workers, many companies have increased their workers’ wages.
This means that the factory, in turn, has a higher cost of operation.
To cover those costs, they have to sell their products at a higher price point.
Others have decided to offer more benefits to their workers to keep them.
Whether it’s better health insurance, more paid time off, or help with student loans, the company is taking on more costs to become more attractive to workers.
The price of their electrical wiring reflects their added costs of operation.
Electrical wiring is expensive because of the increase in labor costs.
8. Few Alternatives
While there are several brands of electrical wiring out there, there aren’t many other alternatives to electrical wiring.
Copper remains one of the best materials to use for wiring.
Aluminum wires were once tried, but they weren’t able to withstand the heat as well.
It resulted in a lot of electrical fires and a lot of burned-down houses.
Because there isn’t an alternative, it means that homeowners and anyone else needing electrical wiring are stuck with what they got.
This means that manufacturers can sell their products at a price point that they want without too much trouble.
While they do have competition with each other, they don’t necessarily have to outbid other types of companies with a new type of wiring.
If someone needs electrical wiring, then they only have one choice.
Because they have a limit of options, they also have no choice but to pay the amount that the supplier wants.
Until something comes along to replace copper in electrical wiring, or electrical wiring in general, the manufacturers and suppliers will have the final say on its price.
Electrical wiring is expensive because it is currently the only way to wire your house for electricity.
9. Increase In New House Construction
One of the hallmarks of the COVID-19 pandemic was an increase in buying homes.
With a bit more cash in hand, people were able to put down payments on homes and buy them.
Others were able to get started on new constructions.
There was a housing boom.
This also raised the price of electrical wiring because it meant that more houses needed new wiring.
When building new construction, one of the most expensive elements is wiring it.
The wires have to trace through every wall and lead to every room that’s going to have electricity in it.
They need to lead to each outlet or each light socket.
Depending on the size of the house, the project could use a lot of wiring.
Since this was happening on a large scale, it meant there was a lot of demand for electrical wiring.
The problem is that factories weren’t producing more electrical wiring to cover the demand.
They were always in short supply.
With high demand due to new housing projects and low supply, the price for electrical wiring increased.
Some factories are still facing supply problems.
Until demand decreases and supply can catch up, the price of wiring will likely remain high.
Electric wiring is expensive because of the increase in new home construction projects.
10. Indoor And Outdoor Use
Some electrical wiring can be used for both indoor and outdoor needs.
For example, you can buy a single spool of this type of wiring and use it to wire a room as well as your outdoor hot tub or shed.
This becomes convenient since you don’t have to go out and buy two different types of wiring.
It may even save you a bit of money if you only need a little bit of wiring for one project over the other.
However, this type of wiring is more expensive than other types of electrical wiring.
That’s more materials are used to make itself safe and suitable for both indoor and outdoor uses.
The company also knows that you’re more likely to buy this type of electrical wiring instead of buying separate wiring for indoor and outdoor needs.
To ensure they still get their revenue from the lack of sale on whatever wiring you were going to originally buy, they increase the price on the wiring that does both jobs.
Electrical wiring is expensive if it’s able to wire things both indoors and outdoors.
When wiring a home, you’ll quickly discover that the price of electrical wiring is quite high.
One of the main reasons electrical wiring is expensive is the rising price of copper.
A few other elements like labor costs and global supply and demand also impact the price of electrical wiring.