solar panel cost and efficiency over time

How solar panel cost and efficiency have changed over time

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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 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 for property owners
  • 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 Solar 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 46 percent efficiency in certain laboratory tests 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.

Infographic: Solar panel efficiency over time

solar panel efficiency over time

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 $2.81/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

the falling cost of solar prices

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.

Three Tips for Solar Shoppers

1. Homeowners who get multiple quotes save 10% or more

As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.

To find the smaller contractors that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $5,000 to $10,000 on their solar panel installation.

2. The biggest installers typically don’t offer the best price

The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.

3. Comparing all your equipment options is just as important

National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.

There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.

For any homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers upfront cost and long-term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.

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

  1. Thomas

    Excellent information with unique content and it is very useful to know about the information How solar panel cost and efficiency have changed over time

  2. Ajay Verma

    Your article describes all the details regarding the How solar panel cost and efficiency have changed over time. It was helpful for me to understand what you are trying to convey in this article. Thank you for posting this article.

  3. eric king

    There is a perpetual mismatch between the best sites for solar and where people wanting to go solar live. we need a way to allow people with good roofs for solar t be able to rent out that space to others with a portion of the power as rent. Only such a solar marketplace can fix the problem.

    Some live in apartment buildings or have large trees or otherwise marginal solar conditions while others have great sites but no money or interest in going solar.

    Given that larger sites are cheaper as well this makes sense, a school in need of funding could offer its massive roof for a solar installation where many could contribute and the school would have permanently lower energy bills at no cost and others would have a place to put solar-maybe even those who have already done their house and want to do more.

    This is one example among thousands, another is the farmer who offers his barn for a solar installation and gets a break on his power bills as he gets maybe 10 percent of the power as rent and becomes a convert to solar as well-undercutting the narrative that solar is something being imposed on people by lefties. I could go on all day on how this works, but simply pit solar is cheaper at larger scale and the best sites are often not owned by those wanting to go solar-

  4. Jeff Krause

    I work for Vivint Solar, the largest residential installer in the US. We run across small mom-and-pop shops that under bid us all the time. The difference is that we warranty our panels, inverters and installations for 20 years -including roof leaks – and we’ll be around if you have an issue. Most smaller companies are using less-efficient panels, inverters, or fewer of them. They base their installations on ‘estimates’ of available sun-hours. We actually measure at the home for every panel on the roof with proprietary Sun Eyes which is technology that we alone own, because we purchased the company that developed it for over $13 million dollars. Smaller companies simply can’t afford
    Many smaller installers only warrant the roof against leaks for 1, 5, or 10 years.
    Can you purchase a cheaper system? Certainly. But that doesn’t mean that is a better deal. The more risk and maintenance you want to assume, the cheaper the costs become. Because we stand behind our systems for two decades, most shoppers understand the greater long-term value of our systems.
    Ultimately, do your homework! We welcome the opportunity to bid anywhere in the 22 states we service.

  5. Solomon Kimmel

    Looking for your latest 60% efficiency panels that I saw on the news?? I I am buying an older Class B RV for the road and would like to get some very high efficiency panels for the entire roof to charge 4 Lithium batteries. Please less me know where or who to contact about this. Thanks Solomon Fairbanks, Alaska


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