The price of solar panels has plummeted by over 99 percent since the 1970s, facilitating widespread uptake of photovoltaic systems that transform sunlight into electrical energy.
A recent MIT investigation delves into particular advancements that triggered such significant cost declines, indicating that technological progress across a network of various research initiatives and sectors was crucial.
The results could assist renewable energy firms in making more informed R&D investment choices and help policymakers pinpoint areas to focus on to stimulate growth in production and implementation.
The modeling method utilized by the researchers demonstrates that major advancements often emerged outside the solar industry, encompassing developments in semiconductor production, metallurgy, glass fabrication, oil and gas extraction, construction techniques, and even legal areas.
“Our findings illustrate just how complex the process of cost enhancement is, and how much scientific and engineering innovations, often at a very fundamental level, are at the core of these cost reductions. A wealth of knowledge was obtained from various fields and industries, and this interconnected pool of understanding is what propels the advancement of these technologies,” states study senior author Jessika Trancik, a professor at MIT’s Institute for Data, Systems, and Society.
Trancik is accompanied on the paper by co-lead authors Goksin Kavlak, a former IDSS graduate student and postdoctoral researcher currently serving as a senior energy associate at the Brattle Group; Magdalena Klemun, a former IDSS graduate student and postdoc who is now an assistant professor at Johns Hopkins University; former MIT postdoc Ajinkya Kamat; as well as Brittany Smith and Robert Margolis from the National Renewable Energy Laboratory. The research is published today in PLOS ONE.
Spotlighting Innovations
This study builds on quantitative models that the researchers had previously developed to extract the impacts of engineering technologies on the costs of photovoltaic (PV) modules and systems.
In this research, the team sought to explore even further the scientific breakthroughs that fueled those cost reductions.
They amalgamated their numerical cost model with an in-depth, qualitative examination of innovations that influenced the expenses of PV system components, manufacturing stages, and deployment methodologies.
“Our quantitative cost model facilitated the qualitative analysis, enabling us to scrutinize innovations in areas that are challenging to assess due to a lack of quantitative data,” Kavlak explains.
Extending earlier efforts to identify primary cost factors — such as the quantity of solar cells per module, wiring efficiency, and silicon wafer dimensions — the researchers performed a structured review of the literature for innovations likely to impact these factors. Following that, they classified these innovations to uncover trends, revealing clusters that lowered costs by enhancing materials or prefabricating components to streamline production and installation. Ultimately, the team traced the origins and timing of each innovation within the industry and consulted domain experts to hone in on the most influential advancements.
In total, they recognized 81 distinct innovations that affected PV system costs since 1970, ranging from enhancements in antireflective coated glass to the launch of fully online permitting systems.
“With innovations, you can always probe deeper, down to aspects like raw materials processing methods, making it difficult to know when to conclude. Having that quantitative model to anchor our qualitative analysis truly aided the process,” Trancik notes.
The researchers elected to distinguish PV module costs from the so-called balance-of-system (BOS) costs, which encompass items like mounting structures, inverters, and wiring.
PV modules, which are interconnected to create solar panels, are mass-manufactured and can be exported, while many BOS components are designed, constructed, and sold locally.
“By investigating innovations both at the BOS level and within the modules, we pinpoint the various types of innovations that have developed in these two segments of PV technology,” Kavlak remarks.
BOS costs are more reliant on soft technologies, non-physical aspects such as permitting protocols, which have contributed far less to past improvements in PV costs compared to hardware innovations.
“Often, it boils down to delays. Time equates to money, and if there are hold-ups on construction sites and unpredictable practices, that influences these balance-of-system expenses,” Trancik explains.
Innovations like automated permitting software, which identifies code-compliant systems for expedited approval, exhibit promise. Although not quantified in this study, the team’s framework could aid future evaluations of their economic impact and similar innovations that facilitate deployment processes.
Interconnected Sectors
The researchers discovered that innovations from the semiconductor, electronics, metallurgy, and petroleum sectors significantly influenced reductions in both PV and BOS costs, while BOS expenses were also affected by advancements in software engineering and electric power companies.
Non-innovation elements, such as efficiency improvements from bulk buying and the gathering of expertise in the solar industry, also mitigated some cost variables.
Moreover, while the majority of PV panel innovations stemmed from research institutions or industry, many BOS innovations were crafted by municipal governments, U.S. states, or professional organizations.
“I recognized there was considerable activity with this technology, but the variety of all these fields and how interconnected they are, coupled with the fact that we can distinctly observe that network through this examination, was intriguing,” Trancik mentions.
“PV was particularly well-placed to assimilate innovations from other sectors — attributable to the right timing, physical compatibility, and encouraging policies to adapt innovations for PV applications,” Klemun elaborates.
The analysis also reveals that enhanced computing capabilities could further diminish BOS costs through advancements like automated engineering review systems and remote site evaluation software.
“Regarding knowledge spillovers, what we’ve witnessed so far in PV may truly just be the onset,” Klemun states, citing the increasing role of robotics and AI-driven digital tools in fostering future cost decreases and quality enhancements.
In addition to their qualitative examination, the researchers illustrated how this methodology could estimate the quantitative impact of specific innovations if sufficient numerical data is available to incorporate into the cost equation.
For example, utilizing data regarding material prices and manufacturing methods, they estimate that wire sawing, a technique introduced in the 1980s, resulted in an overall reduction of PV system costs by $5 per watt through minimizing silicon losses and boosting throughput during fabrication.
“Through this retrospective investigation, one gains valuable insights for future strategies because you can discern what succeeded and what fell short, and the models can also be employed prospectively. It is also beneficial to understand which adjacent sectors may help enhance a particular technology,” Trancik asserts.
Looking ahead, the researchers aim to apply this methodology to an array of technologies, including other renewable energy systems. They also wish to further examine soft technologies to identify innovations or processes that could expedite cost reductions.
“Although the process of technological innovation might seem shrouded in mystery, we’ve demonstrated that it can be analyzed like any other phenomenon,” Trancik concludes.
This research is partially funded by the U.S. Department of Energy Solar Energies Technology Office.