The Future Shines Bright: Unpacking Solar Panel Price Drops Over the Next Decade

Key Insights: What to Expect for Solar Panel Pricing

Dramatic Historical Decline: Solar panel costs have already plummeted by approximately 90% over the past decade, a trend that is widely anticipated to continue.
Significant Future Reductions: Projections for the next 10 years (by 2035) suggest that solar panel module costs could decrease by an additional 30-50%, with overall system costs potentially seeing even greater reductions.
Primary Driving Forces: The ongoing price decline is primarily fueled by continuous technological advancements increasing efficiency, economies of scale in manufacturing, and strong government policies promoting renewable energy.

A Look Back: The Remarkable Journey of Solar Panel Costs

The story of solar panel pricing over the last few decades is one of dramatic reduction. In the 1970s, solar panels were an exotic technology, costing around $76 per watt. By 2010, this had fallen to about $7.50 per watt. The decline accelerated in the subsequent decade, with costs falling by roughly 90%. For instance, an average residential solar system that might have cost around $50,000 a decade ago now averages closer to $25,000 for a typical installation, even before considering incentives.

The Experience Curve Phenomenon

This rapid decrease is often explained by the "experience curve" (or learning curve) effect. For solar PV technology, historical data suggests that for every doubling of cumulative global installed capacity, the price has tended to fall by around 20%. This trend highlights how increased production and deployment lead to innovation, improved manufacturing processes, and ultimately, lower costs for consumers and businesses.

Aerial view of solar panels installed on rooftops

Aerial view showcasing widespread solar panel installations, indicative of the growing adoption driven by falling costs.

The Current State: Solar Panel Prices in May 2025

As of mid-2025, solar panel module prices are hovering near historic lows. Wholesale prices for standard solar modules in competitive markets are frequently reported in the range of $0.10 to $0.25 per watt (Wp), depending on the specific technology (e.g., monocrystalline, polycrystalline), efficiency, brand, and region. For instance, high-efficiency modules in some markets were available for around €0.13/Wp (approximately $0.14/Wp) earlier in 2025.

It's important to note that while module prices have seen the steepest declines, the total cost of a solar system also includes "balance of system" (BOS) costs (inverters, racking, wiring) and "soft costs" (labor, permitting, inspection, customer acquisition, supply chain logistics). While these have also decreased, their rate of decline has generally been slower than that of the panels themselves. There have been some short-term fluctuations, with prices occasionally stabilizing or experiencing slight increases due to supply chain disruptions, increased demand, or changes in trade policies. However, the overarching long-term trend remains downward.

Module Costs vs. Total System Costs

While solar modules themselves represent a significant portion of the initial investment, the total installed cost per watt for a residential system in the U.S., before incentives, typically ranges from $2.24 to $3.07 per watt. This highlights that even as module prices continue to fall, reductions in soft costs and BOS components are also crucial for lowering the final price tag for consumers.

Peering into the Future: Solar Panel Price Projections (2025-2035)

The consensus among industry analysts, energy agencies, and market researchers is that the downward trajectory of solar panel prices will persist over the next decade. While the dramatic 90% drops of the past are unlikely to be repeated in the same magnitude, substantial cost reductions are still anticipated, making solar energy even more competitive.

How Much Cheaper Will Solar Panels Become?

Predicting exact percentages over a decade involves various dynamic factors, but several sources provide strong indications:

Module Costs: Many experts project that solar panel module costs could decrease by an additional 30-50% by 2035 from current 2025 levels. This could bring average module prices well below $0.15 per watt, with some forecasts suggesting prices approaching or even dipping below $0.10 per watt for utility-scale purchases.
System Costs: Overall system costs are also expected to decline significantly. Some analyses, like those from BloombergNEF, suggest cost reductions for clean technologies, including solar, in the range of 22-49% by 2035. More aggressive models predict that total installed system costs for utility-scale solar could fall by 40-75% from 2025 baselines. The U.S. Department of Energy (DOE) has set ambitious goals to cut the cost of utility-scale solar to 3 cents per kilowatt-hour (kWh) by 2025 and 2 cents per kWh by 2030, which inherently relies on continued reductions in both panel and system costs.

These reductions will further enhance the economic viability of solar power across residential, commercial, and utility-scale applications, accelerating its adoption globally.

Catalysts for Cost Reduction

Several key factors are expected to drive these future price declines:

Technological Breakthroughs and Efficiency Gains

Ongoing research and development are yielding more efficient and cost-effective solar cell technologies. This includes:

Higher Efficiency Panels: Standard silicon-based panels continue to see incremental improvements in efficiency, meaning more power can be generated from the same area, reducing the number of panels and associated BOS costs per project. Average efficiencies are already in the 18-22% range and are expected to climb.
New Materials: Emerging technologies like perovskite solar cells show promise for even higher efficiencies and potentially lower manufacturing costs. Tandem cells, combining perovskites with silicon, are also being actively developed.
Advanced Panel Designs: Innovations such as bifacial panels (which capture sunlight from both sides) and solar tiles are becoming more mainstream, offering diverse application possibilities and improved energy yield.

Economies of Scale and Manufacturing Advancements

The global solar market is experiencing rapid growth, leading to:

Increased Production Capacity: Manufacturing facilities are scaling up, particularly in regions like China, which accounts for a significant portion of global production. This leads to lower per-unit costs. Projections indicate global solar panel production capacity could exceed 1.5 terawatts (TW) by 2035.
Improved Manufacturing Processes: Automation, streamlined supply chains, and more efficient use of materials are continuously reducing the cost of producing solar panels.

Supportive Policies and Global Decarbonization Goals

Governments worldwide are implementing policies to encourage renewable energy adoption:

Financial Incentives: Tax credits (like the 30% federal Investment Tax Credit in the U.S.), rebates, and subsidies reduce the upfront cost for consumers and businesses, driving demand.
Renewable Energy Mandates: National and international commitments to reduce carbon emissions (e.g., the Paris Agreement) are pushing investments in solar and other renewables, fostering market growth and competition.

Charting the Influences: Factors Shaping Solar Costs

The future cost of solar panels will be shaped by a complex interplay of several key factors. The radar chart below visualizes the anticipated impact of these drivers on price reduction over the next decade. A higher score (further from the center) indicates a stronger downward pressure on prices attributed to that factor. These are qualitative assessments based on current trends and expert opinions.

This chart illustrates that technological innovation and economies of scale are expected to be strong drivers, with continued support from government policies and advancements in materials and manufacturing processes also playing crucial roles.

Interconnected Dynamics: A Mindmap of Price Influences

To further understand the multifaceted nature of solar panel pricing, the mindmap below visualizes the key elements and their relationships. It shows how historical trends, projected declines, driving factors, and potential moderating influences are all interconnected in shaping the future cost landscape of solar energy.

mindmap root["Solar Panel Price Outlook
2025-2035"] id1["Historical Context"] id1a["Approx. 90% Price Drop
in Last Decade"] id1b["Experience Curve Effect
(~20% drop per capacity doubling)"] id2["Projected Price Decline by 2035"] id2a["Modules: Expected 30-50%+ Drop"] id2b["Overall System Costs:
Potential 40-75% Drop"] id2c["Continued Path to Greater Affordability"] id3["Key Driving Factors for Price Reduction"] id3a["Technological Advances"] id3aa["Higher Efficiency Cells (Silicon)"] id3ab["Emerging Materials
(e.g., Perovskites, Tandem Cells)"] id3ac["Advanced Panel Designs
(e.g., Bifacial, Solar Tiles)"] id3b["Economies of Scale"] id3ba["Increased Global Manufacturing Capacity"] id3bb["Growing Global Demand & Deployment"] id3bc["Optimized Supply Chains"] id3c["Supportive Policies & Market Growth"] id3ca["Government Incentives & Tax Credits"] id3cb["National & International
Decarbonization Goals"] id3cc["Strong Market Competition"] id4["Potential Moderating Factors & Uncertainties"] id4a["Short-term Supply Chain Volatility"] id4b["Geopolitical Factors & Trade Policies (Tariffs)"] id4c["Slower Reduction in Soft Costs
(Installation, Permitting)"] id4d["Manufacturer Profitability & Market Consolidation"] id4e["Raw Material Price Fluctuations"]

Navigating Potential Headwinds

While the outlook is largely positive, certain factors could moderate the pace of price declines:

Supply Chain Issues: As seen in recent years, disruptions to global supply chains for raw materials (like polysilicon) or components can cause temporary price instability or increases.
Trade Policies and Tariffs: Import tariffs or other trade restrictions imposed by governments can impact the cost of panels in specific markets.
Soft Costs: While panel prices fall, the "soft costs" associated with installation, permitting, and customer acquisition may not decrease as rapidly, potentially slowing the reduction in total system cost for consumers.
Manufacturer Profitability: Extremely low prices, while beneficial for consumers, can put pressure on manufacturers, potentially leading to market consolidation or reduced investment in R&D if profit margins become unsustainable.

A Decade of Solar: Summarized Price Evolution and Projections

The following table provides a simplified overview of past, current, and projected solar cost trends, highlighting the continuous drive towards greater affordability. Note that prices can vary significantly by region, technology, and scale of installation.

Period	Cost Component	Estimated Price Range / Target	Key Influences & Notes
Past Decade (c. 2015-2024)	Solar Modules (per Watt)	Dropped from >$0.60/W to ~$0.20s/W	Rapid technological innovation, massive scaling of manufacturing (especially in China).
Past Decade (c. 2015-2024)	Residential System (Avg. Total Cost)	Decreased from ~$50,000 to ~$25,000 for a typical system	Driven by module cost drops and improvements in installation efficiency.
Current (May 2025)	Solar Modules (per Watt)	~$0.10 - $0.25/W	Near all-time lows; influenced by high production, competition; some short-term stabilization.
Current (May 2025)	Residential System (Installed, per Watt, pre-incentive)	~$2.24 - $3.07/W	Includes modules, BOS, and soft costs.
By 2030 (Projection)	Solar Modules (per Watt)	Potentially $0.10 - $0.15/W or lower	Continued technological gains, economies of scale, DOE targets.
By 2030 (Projection)	Utility-Scale Solar (LCOE)	Targeting ~$0.02/kWh (DOE Goal)	Aggressive cost reductions across entire system and operational lifecycle.
By 2035 (Projection)	Solar Modules (per Watt)	Additional 30-50% drop from 2025 levels	Sustained innovation, mass deployment, maturation of newer technologies.
By 2035 (Projection)	Overall System Costs	Potential 40-75% drop from 2025 baselines	Benefits from module price drops, but also reliant on reducing BOS and soft costs.

The Bigger Picture: Solar's Expanding Role in Global Energy

The declining cost of solar power is a critical enabler of the global transition towards cleaner energy systems. As solar becomes increasingly cost-competitive with, and often cheaper than, fossil fuels, its share in the global energy mix is set to expand dramatically. Some S-Curve modeling analyses predict that solar energy could contribute to as much as half of the world's energy supply by 2035. The video below explores such projections and discusses the transformative potential of solar energy's growth trajectory.

This rapid expansion is driven not just by falling prices but also by increased awareness of climate change, energy security concerns, and the ongoing innovation that makes solar technology more efficient, versatile, and accessible than ever before.