A new study by the Massachusetts Institute of Technology (MIT), published in PLOS ONE, provides an in-depth analysis of the drivers behind the more than 99% decline in solar panel costs since the 1970s, highlighting the critical role of interdisciplinary research and cross-industry technological advancements.
The study notes that these findings not only help renewable energy companies make more effective R&D investment decisions, but also provide policymakers with a basis for identifying priority areas to stimulate growth in manufacturing and deployment. Through modeling, the researchers found that key innovations in the photovoltaic field often originate from outside the industry, spanning multiple sectors including semiconductor manufacturing, metallurgy, glass manufacturing, oil and gas drilling, construction processes, and even law.
The study builds on a mathematical model previously developed by the researchers, combining a quantitative cost model with a detailed qualitative analysis of innovations affecting the cost of materials, manufacturing steps, and deployment processes in photovoltaic systems. It identifies 81 distinct innovations that have influenced the cost of photovoltaic systems since 1970, ranging from improvements in anti-reflective coated glass to the implementation of fully online permitting interfaces.
The researchers found that innovations from the semiconductor, electronics, metallurgy, and oil industries played a major role in reducing photovoltaic and balance-of-system (BOS) costs, while BOS costs were also influenced by innovations in software engineering and electric utilities. Non-innovation factors, such as bulk purchasing and the accumulation of industry knowledge, also contributed to lowering certain cost variables. In addition, many BOS innovations were developed by municipal governments, U.S. states, or professional associations.
The study also shows that advancements such as automated engineering review systems and remote site assessment software demonstrate that stronger computing power can play a significant role in reducing BOS costs. The role of robotics and AI-driven digital tools in driving future cost reductions and quality improvements is also expected to expand.
Using numerical data plugged into cost equations, the researchers estimated the quantitative impact of specific innovations. For example, the wire saw technology introduced in the 1980s reduced the cost of the entire photovoltaic system by $5 per watt. Looking ahead, the researchers plan to apply this method to a broader range of technology areas, including other renewable energy systems, and to further study "soft" technologies to identify innovations or processes that can accelerate cost reductions.
