How did the cost of solar power decrease so rapidly?

From a high of about $30/W in the early 1980s, solar power plants (ground mounted solar farms) in most parts of the world cost much less than $2/W in 2016!

Even as recent as 2010, a similar solar PV power plant cost about $5/W, which implies a cost decrease of 60% just in the last 6 years.

The crash in the prices to a large extent have to do with the crash in the price of solar panels.

Solar panels cost about $25/W in early 80s. By 2010, it was just about $3/W.

And the fascinating story does not end there.

In mid 2016, the price of a solar panel was less than $0.5/W!

Thus, the cost of solar panels had come down by almost 90% between 1980 and 2010, and a further 85% between 2010 and 2016!

The rest of a solar power plant (inverters, cables, mounting structures) have seen decreases in cost over the past decade. But the dramatic cost decreases of solar power plants are mainly owing to the dramatic decreases in the cost of solar panels which even today constitute about 50% of the total cost of a large scale solar farm!

I consider myself fortunate to be a direct witness to the cost crash in solar. It was in 2010 when the solar power movement started gaining momentum in India (where I live), with the government coming up with the National Solar Mission. My firm started providing consulting services to the Indian solar power sector the same year. In 2010, a 1 MW ground-mounted solar PV power plant cost about Rs 15 crores. Fast forward to 6 years later (mid 2016), and the cost of a 1 MW solar PV power plant is just over Rs 5 crores. You can hence say you had live testimony of a 66% cost crash in 6 years from someone who had been there, seen that.

How did the cost of solar power decrease so rapidly? - Cleantech Guide

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