History of solar energy prices

There is a clear trend towards an increase in the installation of solar power plants. One of the main reasons for this is the fall in the price of photovoltaic modules, which are one of the most important components of any solar power plant. Let’s take a look at why this is happening.

How did solar become so cheap?

In 1975, the first solar panels cost about $115.3 per watt. By 2010, this price was already $2.15 per watt, and by 2021 it will be only $0.27 per watt. We are witnessing a significant reduction in the cost of one of the most important green technologies – by almost 90% in the last 10 years.

Graph of solar panel prices over time (logarithmic scale)
Graph of solar panel prices over time (logarithmic scale)

In many parts of the world, it is already cheaper to generate electricity using solar technologies than using traditional methods such as nuclear or thermal power plants fired by coal and natural gas. This can be considered an unqualified success.

What has contributed to such a rapid reduction in technology costs?

The energy crisis

In the 1970s, the world faced an oil crisis. This led to increased pressure to research and develop alternative energy sources. The US federal government allocated more than $8 billion to research and development of solar energy technology. As a result of this programme, the efficiency of solar panels doubled. A process began whereby increased production of modules led to a reduction in their cost. 

After the programme ended, it was the Japanese who continued to work in this area. By the end of the 1980s, they had developed small but relatively powerful modules for powering watches, calculators, etc.

But so far, the global market for solar modules has been insignificant.

The driving force

In many developed countries, the process of introducing economic incentives for the use of renewable energy sources (RES) began in the mid-1990s. But the most influential was the feed-in tariff policy introduced in Germany in 2000. The German government promised to pay renewable electricity producers twice the market price for 20 years.

There was a boom in the installation of solar capacity. Demand for solar panels increased – the more they were produced, the cheaper they became.

At some point, China entered the market for manufacturing components for solar power plants, leading to a rapid increase in the production of solar panels. Prices began to fall even further. The success of China’s first commercial solar module manufacturing company contributed to the growth of competition in this market. 

This came full circle, as the development of the technology contributed to falling prices, which in turn attracted new players to the market, which increased demand, and increased demand stimulated further development of the technology…

Many countries around the world began to introduce legislation that stimulated the development of the renewable energy market, including Ukraine, which introduced a mechanism of state support for the industry through a feed-in tariff in 2009.

In just half a century, solar panels have gone from being an expensive niche technology used in space to one of the cheapest sources of energy in the world. 

In summary, we can confidently say that today, thanks to a significant reduction in the price of equipment, the installation of solar power stations is becoming not only an environmentally ethical act, but also an economically viable one. And the prospect of legislative incentives for such decisions is becoming another important factor that will bring even more benefits to the owners of solar power plants.


Key business activities of Avenston

Utility-Scale Solar Plants

We build on-grid utility-scale solar PV power plants to operate using a "green" tariff or to sell electricity through a system of "green" auctions. On-grid ground-mounted solar power plants - project, turnkey EPC-contract, connection to grid.
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Commercial Solar Plants

Since 2010, we have been performing a full range of development, engineering, construction, and maintenance for all types of solar photovoltaic power systems. Huge practical experience in the construction of solar power plants for commercial use.
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Floating PV Power Plants

We offer all necessary services and innovative solutions for the implementation of floating solar power plants (FPV) in Europe and the Middle East. Technical consulting, design, and turnkey EPC services.
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Energy Storage Systems

A full range of services for the implementation of battery energy storage systems (BESS) for solar PV power plants and other renewable energy facilities, industry and the commercial sector. Development, design, construction and commissioning.
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Equipment for Solar Power Farms

Avenston has many years of experience in planning and procurement, and supply of equipment and materials to the site. The coordination of suppliers, cost and choice of payment methods of goods delivery, and choice of optimal delivery schedule.
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Backup Power Supply

We provide services for the installation of modern uninterruptible and backup power sources for commercial enterprises. Design, installation and service of low and medium power UPS. Backup power supply systems.
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Operations & Maintenance

We expand the useful lifetime of facilities, maximize their profitability, streamline their performance and availability, and minimize their consumption and operating costs. Routine and non-routine maintenance, warranty, and service.
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Additional Engineering Services

Avenston provides separate services related to the technical aspects of implementing projects in renewable energy: simulating, feasibility study, design, installation and electrical works.
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