The Price Collapse That Changed Energy Forever: Understanding the Global Decline in PV Module Costs
One of the most consequential developments in the history of solar photovoltaics is not a single technological breakthrough, but a sustained and dramatic decline in cost. Figure illustrates the global reduction in PV module prices over several decades—a trend that fundamentally transformed solar energy from an expensive niche technology into one of the world’s most affordable sources of electricity.
In the early years of photovoltaic development, module costs were prohibitively high. During the 1960s and 1970s, solar panels were primarily manufactured for space applications, where performance and reliability mattered far more than price. Costs exceeded hundreds of dollars per watt, restricting terrestrial use to highly specialized applications such as remote sensing and scientific instrumentation.
The first meaningful reductions in module prices began in the late 1970s and 1980s, driven by early terrestrial manufacturing and government-supported research programs. However, progress during this period was gradual. Manufacturing volumes were low, processes were manual, and supply chains were fragmented. Solar PV remained a premium technology, viable mainly where alternatives were unavailable or extremely costly.
A turning point emerged in the 1990s and early 2000s as PV manufacturing began to scale. Standardization of module designs, incremental improvements in cell efficiency, and learning-by-doing contributed to steady cost reductions. The concept of the “learning curve” became evident: for every doubling of cumulative installed capacity, module prices declined by a predictable percentage. This phenomenon—now widely known as Swanson’s Law—would later become a defining characteristic of the solar industry.
The most dramatic phase of cost decline began after 2010. Several forces converged during this period. Large-scale manufacturing facilities were established, particularly in Asia, enabling unprecedented economies of scale. Automation reduced labor costs and improved consistency, while global supply chains lowered the cost of raw materials such as polysilicon and glass.
Technological innovation played an equally important role. Cell efficiencies improved through the adoption of architectures such as PERC, while wafer thickness decreased, reducing material consumption. Manufacturing yields increased, waste declined, and production throughput accelerated. Each incremental improvement compounded the overall cost reduction.
Between 2010 and 2024, global PV module prices fell by nearly 90%. This decline reshaped electricity markets worldwide. Solar PV transitioned from a subsidized alternative to a cost-competitive, and often cost-leading, source of new power generation. In many regions, solar became cheaper than coal, gas, or nuclear power on a levelised cost basis.
The implications of this cost collapse extended far beyond module pricing alone. Lower module costs reduced the overall capital expenditure of solar projects, improving bankability and attracting private investment. Financial institutions gained confidence in PV as a mature asset class, further accelerating deployment. At the same time, competitive pressure shifted industry focus toward reducing balance-of-system costs, including inverters, mounting structures, and installation labor.
Importantly, declining costs also democratized access to solar energy. Residential rooftop systems, once limited to affluent early adopters, became accessible to a broader population. In developing regions, low-cost modules enabled off-grid and mini-grid solutions, expanding energy access and supporting economic development.
Figure also highlights an important strategic lesson: cost reduction is not driven by a single innovation, but by cumulative, system-wide optimization. Manufacturing scale, policy support, global competition, and technological learning reinforced one another over decades. This dynamic continues today as the industry pushes toward higher efficiencies, longer lifetimes, and lower environmental footprints.
Looking forward, further cost reductions are expected, though at a slower pace. Emerging technologies such as tandem cells, improved recycling processes, and digital manufacturing may extend the learning curve. However, the most profound transformation has already occurred: solar PV is no longer constrained by cost. Instead, its future is shaped by integration, storage, and system-level optimization.
Figure captures the economic backbone of the solar revolution. Without this sustained decline in module costs, gigawatt-scale deployment and global energy transition would not have been possible. Understanding this trend is essential for anyone seeking to grasp why solar energy now sits at the center of global power systems.
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