Decline In Solar Panel Prices Over Time

Utility scale renewable energy prices are now.

Decline in solar panel prices over time.

The dramatic drop in the cost of solar photovoltaic pv modules which has fallen by 99 percent over the last four decades is often touted as a major success story for renewable energy technology. Over the last decade wind energy prices have fallen 70 and solar photovoltaics have fallen 89 on average according to lazard s 2019 report. But one question has never been fully addressed. Barely five years later most ppas in the 2015 sample are priced at or below 50 mwh.

We might now be in a post swanson era. Solar panel cost over time the price decreases over the past ten years are a major reason why homeowners are increasingly interested in installing solar panels. It s a good idea not to get these percentages confused. Trends have continued until recently with a report from the nrel that showed the price per watt of solar energy dropped by 27 in the first quarter of 2017 alone.

Note these figures may have a minus sign in front of them as in 0 7 or 0 25. Today it s around 0 13 per watt or about 600 times less. Prices have dropped more than 60 percent in the past several years with the average upfront cost for the commonly used 6 kw system landing between 16 200 21 420. Second ppa costs are falling.

What exactly accounts for that stunning drop. Let s add forecasts made by the international energy agency iea in their 2010 world energy outlook along with the forecast i made in 2011 at scientific american. According to swanson s law whenever the production and shipment of solar panels doubles panel prices drop by 20 percent. Changes in solar panel cost over time can be explained by swanson s law which states that the price of solar pv modules decreases by about 20 percent for every doubling in global solar capacity.

The effect is cyclical. As costs decline the number of people for whom solar is a viable affordable possibility increases which further depresses panel prices. As recently as 2011 solar ppa prices in excess of 100 mwh were quite common. Just as remarkably and relevant for considering the future cost of solar the decline of solar prices over the past decade has been faster than almost any credible forecast.

The cost has generally been following swanson s law which states that the price of solar drops by 20 for every doubling of shipped product.