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What Made Solar Panels So Cheap?

Last edited: 18/02/21

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What Made Solar Panels So Cheap?

Last edited: 18/02/21

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Solar panels have never been more affordable, and it’s frequently held up as a success story for clean energy supporters. In the past 4 decades, the price of some solar panels, like photovoltaic cells, has declined by as much as 99%.But while the technology’s growth is remarkable, until now, we didn’t have a clear understanding of all the factors that made it so inexpensive so quickly. Also, there have been questions as to whether the dramatic savings can last – particularly as renewable subsidies stall.

A recent study from MIT has looked thoroughly at the history of PTV solar panels to find out what has caused their cost decline over time. One of the most critical components identified was government policy, which implies that going forward, this might be one of the best innovation for solar expansion and the fight against environmental change.

Making use of a dynamic model that goes beyond simple links, the findings strongly advocate that it is, indeed, possible for governments to take necessary steps that make solar power much cheaper. Moreover, taking these steps can promote a symbiotic relationship between climate policies and technology innovation.

When government policies exist that deal with carbon emissions, the researchers noticed growth and improvement in low-carbon technologies. By developing this market, governments around the world played a critical role in decreasing the cost of technology and, in turn, the expense of cutting carbon emissions. The investigators looked at solar growth from the year 1980 to 2012, during which time the price of solar panels declined by 97%. From above, they studied the high-level elements for one analysis: the changes in research, production, and distribution. And then from below, they individually analyzed the low-level details: the simple science and engineering of the solar panels.

The discoveries reveal that six low-level elements accounted for over 60% of the entire drop in prices. This is a good sign since it means there are a number of different levers we can pull to try and keep solar power competitive and affordable.

To sum up, if we want solar growth to last on this path, the more doors we can open, the better it is. And in case we want the price of solar panels to continue to fall, it’s vital that we find out how to manipulate the factors that decrease prices.

Demand for the technology is similarly a crucial factor the team found when investigating the high-level factors. They found that 60% of the entire cost decline was just because of the policies implemented by the government that stimulated market growth.

In the past, governments have similarly facilitated considerably by funding R&D. Actually, this kind of investment accounted for 40% of the entire cost decline.

Now that the technology has improved a lot, though, the impact of R&D may not be as significant today – although it is still essential. The researchers discovered instead that in the last decade, expanding production has had a more substantial impact on reducing costs.