The MIT study reveals that the cost of solar panels has decreased by over 99% since the 1970s due to a myriad of innovations spanning various industries. This comprehensive analysis highlights the significant role of advancements not just in solar technology but also in sectors such as semiconductor fabrication, metallurgy, and construction processes. The findings aim to aid renewable energy companies in their R&D efforts and guide policymakers toward effective strategies for promoting growth within this sector.
The cost of solar panels has dropped by more than 99 percent since the 1970s, enabling widespread adoption of photovoltaic systems that convert sunlight into electricity. A new MIT study drills down on specific innovations that enabled such dramatic cost reductions, revealing that technical advances across a web of diverse research efforts and industries played a pivotal role. The findings could help renewable energy companies make more effective R&D investment decisions and aid policymakers in identifying areas to prioritize to spur growth in manufacturing and deployment. The researchers’ modeling approach shows that key innovations often originated outside the solar sector, including advances in semiconductor fabrication, metallurgy, glass manufacturing, oil and gas drilling, construction processes, and even legal domains. “Our results show just how intricate the process of cost improvement is, and how much scientific and engineering advances, often at a very basic level, are at the heart of these cost reductions. A lot of knowledge was drawn from different domains and industries, and this network of knowledge is what makes these technologies improve,” says study senior author Jessika Trancik, a professor in MIT’s Institute for Data, Systems, and Society. Trancik is joined on the paper by co-lead authors Goksin Kavlak, a former IDSS graduate student and postdoc who is now a senior energy associate at the Brattle Group; Magdalena Klemun, a former IDSS graduate student and postdoc who is now an assistant professor at Johns Hopkins University; former MIT postdoc Ajinkya Kamat; as well as Brittany Smith and Robert Margolis of the National Renewable Energy Laboratory. The research appears today in PLOS ONE.
This work builds on mathematical models that the researchers previously developed that tease out the effects of engineering technologies on the cost of photovoltaic (PV) modules and systems. In this study, the researchers aimed to dig even deeper into the scientific advances that drove those cost declines. They combined their quantitative cost model with a detailed, qualitative analysis of innovations that affected the costs of PV system materials, manufacturing steps, and deployment processes. “Our quantitative cost model guided the qualitative analysis, allowing us to look closely at innovations in areas that are hard to measure due to a lack of quantitative data,” Kavlak says. Building on earlier work identifying key cost drivers — such as the number of solar cells per module, wiring efficiency, and silicon wafer area — the researchers conducted a structured scan of the literature for innovations likely to affect these drivers. Next, they grouped these innovations to identify patterns, revealing clusters that reduced costs by improving materials or prefabricating components to streamline manufacturing and installation. Finally, the team tracked industry origins and timing for each innovation, and consulted domain experts to zero in on the most significant innovations. All told, they identified 81 unique innovations that affected PV system costs since 1970, from improvements in antireflective coated glass to the implementation of fully online permitting interfaces. “With innovations, you can always go to a deeper level, down to things like raw materials processing techniques, so it was challenging to know when to stop. Having that quantitative model to ground our qualitative analysis really helped,” Trancik says.
They chose to separate PV module costs from so-called balance-of-system (BOS) costs, which cover things like mounting systems, inverters, and wiring. PV modules, which are wired together to form solar panels, are mass-produced and can be exported, while many BOS components are designed, built, and sold at the local level. “By examining innovations both at the BOS level and within the modules, we identify the