solar panel cost and efficiency over time

How solar panel cost and efficiency have changed over time

Solar panel technology has been around in some form for a long time – Bell Labs invented the first useful solar cell more than 60 years ago, and scientists have known for centuries that the sun can be used to produce energy. However, it’s only in the last ten years or so that solar photovoltaics (PV) has really taken off as a renewable energy source. There are two major factors influencing the technology’s growth: the steady improvement of both solar panel cost and solar panel efficiency over time.


Key takeaways


  • Solar panel efficiency is a measure of a solar panel’s ability to convert solar energy into usable energy.
  • Solar panel efficiency has dramatically improved over time, and panels continue to push new limits each year.
  • At the same time, the cost of going solar continues to drop.
  • Start comparing custom solar quotes on the EnergySage Marketplace to see your potential savings.

Solar panel efficiency over time

The very first solar cells, invented in the 1800s, were less than one percent efficient, not nearly enough to make them a useful energy source. It wasn’t until 1954 that Bell Labs invented the first useful silicon solar panel, which was about six percent efficient.

Since then, solar PV technology has evolved at a rapid pace. Manufacturers have been able to create prototype solar panels that are over 30 percent efficient, and homeowners on the EnergySage Marketplace regularly receive quotes featuring solar panels with 20 to 22 percent efficiency from solar installers. These high-efficiency panels can produce 25 percent more electricity than the lower-tier economy panels that made up the majority of the market in past years.

The technology exists to increase solar panel efficiency even further. Researchers have managed to achieve 47.1 percent efficiency using advanced cell structures. However, super high-efficiency panels are typically made of more expensive materials not used in rooftop solar panels, and as a result, they aren’t currently cost-effective.

What is solar panel efficiency?


Solar panel efficiency is a measurement of a solar panel’s ability to convert sunlight into usable electricity. For example, if the sun shines on a high efficiency solar panel with a 20 percent rating, then 20 percent of the sun’s energy will be converted to solar energy. Read this article to learn more about the most efficient solar panels on the market today.

Tracking solar panel efficiency

The rate to solar panel efficiency has been a long one, but is heating up right now. Take a look at how much the past years have mattered in the grand scheme of solar innolvation:

  • 1960: Hoffman Electric achieves 14% efficiency in PV cells
  • 1992: University of South Florida fabricates a 15.89% efficient thin-film cell
  • 2012: Solar Frontier reaches 17.8% efficiency
  • June 2015: First Solar breaks 18.2% efficiency
  • October 2015: SolarCity announces 22.04% efficiency and Panasonic announces 22.5% efficiency
  • November 2015: SunPower achieves 22.8% efficiency, validated by the National Renewable Energy Laboratory (NREL)
  • January 2016: NREL and Swiss Center for Electronics and Microtechnology (CSEM) achieved 29.8% efficiency
  • July 2017: A group of U.S. scientists develop a prototype for a solar cell capable of 44.5% efficiency
  • April 2020: NREL researchers develop a six-junction III-V solar cell with 47.1% efficiency

Cost of solar panels over time: a tale of falling prices

Over a decade ago, in 2009, the cost of a solar panel installation was $8.50 per watt. The solar industry today looks very different: in addition to solar panel efficiency increasing dramatically, solar panel producers have significantly improved their manufacturing processes. Solar installers, too, can deploy solar PV across the United States more efficiently now than they could ten years ago. The result: the price of solar has fallen dramatically, to just $2.77/watt.

There’s evidence that solar prices are continuing to fall. Prices featured in quotes to homeowners on the EnergySage Solar Marketplace continue to fall:

Solar panel cost over time

Solar cost H2 2021

The price decreases over the past ten years are a major reason why homeowners are increasingly interested in installing solar panels.

Changes in solar panel cost over time can be explained by Swanson’s Law, which states that the price of solar PV modules decreases by about 20 percent for every doubling in global solar capacity. The law is named after Richard Swanson, founder of high-efficiency solar panel manufacturer SunPower, and indicate a phenomenon seen across many different technologies: new industries face a major learning curve, and as they improve, prices fall.

In this way, solar panel manufacturers aren’t that different from computer manufacturers. Think about how much more expensive, and less powerful, your laptop was in 2009 compared to the technology that’s available today. If solar PV technology continues along the same trend, it’s easy to envision a future where solar is on every rooftop.

Frequently asked questions about solar panel efficiency

How efficient are solar panels in the real-world? 

There are many factors that can affect the efficiency of your solar panels including weather, debris on your panel, or installation issues. That being said, all solar panels are tested under Standard Test Conditions to produce an accurate and standardized efficiency quote. Your panel’s temperature coefficient can help you understand how the efficiency may fluctuate depending on the temperature outside, or how the PV cells in your panel react to summer heat or winter’s cold. 

Will solar panels ever reach 50 percent efficiency?

Maybe! Researchers say that he technology used by NREL to create solar cells with 47.1 percent efficiency can be fine-tuned to reach 50 percent efficiency in the future. This technology does differ from traditional solar cell devices because there are 140 layers of the six collector materials used to make this high efficiency panel. A detailed description of the new technology was published in the journal Nature Energy.

What is the most efficient type of solar panel?

Currently, the most efficient solar panels available on the market are about 23 percent efficient. More specifically, SunPower’s high efficiency solar panels are recognized as the most efficient solar panels available, with a rating of 22.8 percent. Other manufacturers who make some of the most efficient solar panels include LG (22 percent) and REC Solar (21.7 percent). 

Find efficient solar panels on EnergySage

It’s easy to compare quotes with efficient solar panels on the EnergySage Marketplace. You can receive free quotes from vetted installers when you register your property! If you’re in the early stage of shopping for solar and would just like a ballpark estimate for an installation, try our Solar Calculator, which offers upfront cost and long-term savings estimates based on your location and roof type.


22 thoughts on “How solar panel cost and efficiency have changed over time

  1. James Cawse

    Do solar panels have a “break-in” period where the initial high efficiency decreases over 6 months or so before leveling off? I’ve been tracking my power output for the running 12-month total was over 6000 kwh and then leveled off at ~5800 kwh for the last six years.

    Reply
  2. Will

    The “Solar panel cost over time” graph is very misleading. The baseline should be $0, not $2.75. The graph in its current form makes it look like the cost per watt is less than 20% of what it was in 2017.

    Reply
    1. Brent Lidstone

      You’re completely right, and I wouldn’t have noticed it if I hadn’t read your comment. The implication of the graph is very misleading without thinking about how much further down it should go.

      Reply
  3. IST

    Need knowledge in the areas of concept development, site identification, feasibility study, detailed system design, engineering, construction & commercial operation, operational performance monitoring of solar Utility Scale power projects, financial aspects of the solar power plant like DPR,DSCR,ROI,CUF estimation and CAPEX ,OPEX modelling.

    Reply
  4. Rahul

    Solar panel efficiency has increased over the years with Panasonic HIT Mono Panels hitting the efficiency of more than 20%.

    Reply
  5. Vishyat Technologies

    Very informative article. I think in coming 20 years solar price will drop and with new battery technologies storing power may become cheaper. Moreover EVs may act as emergency powerhouse in future.

    Reply
  6. Geraldine Woods

    I am writing a book about student projects, to be published next year by WW Norton. I would like to include the graph entitled “Gross Cost Per Watt, by Half Year.” I will of course credit EnergySage. Please let me know how to go about getting permission. Thanks.

    Reply
  7. Craig Johnston

    Exciting stuff! A question I’d like to ask: To what extent are smaller scale solar technologies (eg. solar panels for camping, landscape lighting, etc) benefiting from advances in larger installations?

    Thank you.

    Reply

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