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Since the 1970s, the price of solar panels has dropped by more than 99 per cent. That has turned a once costly technology into a widely used power source for millions of homes,  one that has reshaped energy markets worldwide.

A new MIT study published in PLOS ONE has revealed why solar power prices have plunged so far, revealing the intricate web of hidden breakthroughs that made photovoltaic (PV) systems a global engine of change for net-zero goals.

The findings show how decades of innovation, much of it from outside the energy sector, have propelled solar power into the mainstream. They also offer valuable lessons that could help bring down the costs of other renewable technologies.

A cascade of breakthroughs

Researchers at MIT traced 81 distinct innovations that have reduced PV system costs since 1970. These ranged from changes inside the panels – such as wire-sawing, a technique used to slice large silicon blocks into thin solar cell wafers, greatly reducing silicon waste – to systemic improvements, like faster permitting procedures for new projects. 

These breakthroughs didn’t come from the solar world alone. Innovations in fields as varied as semiconductors, metalworking, glassmaking and even legal reforms all played a surprising role in driving down costs and boosting solar power’s performance.

Kostantsa Rangelova, global electricity analyst at energy think tank Ember, explains that these incremental improvements are most effective when combined with “higher-level mechanisms such as learning-by-doing and economies of scale,” meaning that as production ramps up, small gains are magnified into substantial cost reductions.

“The story of how solar became the cheapest form of electricity in history, in the words of the International Energy Agency, is one of a steady pace of systemic incremental innovations that brought new materials, tools and processes, often combining these elements to improve efficiency and reduce costs,” she says.

Solar nears a tipping point in Europe

The impact of these long-term cost cuts is now clear in Europe’s power mix.

In June, solar power generated more electricity than any other source in the EU for the first time in history, a symbolic milestone that comes as clean energy investment surges.

Globally, around €1.7 trillion was invested in renewables last year, €685 billion more than fossil fuels. Experts say the sector is approaching a positive tipping point, a moment when small changes can catalyse rapid, irreversible growth.

Offshore wind is now 53 per cent cheaper than fossil fuels, but solar power’s fall in cost has been the most dramatic. Decades of steady R&D, mass production and knowledge spillovers from other industries have brought Europe to the point where solar is not only competing against fossil fuels, but rather leading a shift toward renewable sources.

What still needs to change?

For MIT’s researchers, the lesson from solar power’s past is that breakthroughs often come from unexpected places. The next phase of cost reductions could depend as much on processes, policies and software as on materials and hardware.

AI-driven design tools, robotics for faster installation and better integration with electricity grid management could deliver fresh savings and quality improvements, the authors argue.

“In terms of knowledge spillovers, what we’ve seen so far in PV may really just be the beginning,” said co-author Magdalena Klemun.

Greater computing power is already enabling remote site assessments and automated engineering reviews, which can cut delays and costs.

Rangelova adds that another key lesson from solar power’s sweeping cost reductions is modularity. In other words, designing technologies like solar panels so that they are made of smaller, standardised and easily reproducible parts. That allows technologies to be manufactured and installed more simply and quickly.  

“This is already contributing to rapid cost reductions in battery technologies,” she says.

Yet, as the technology advances, other challenges demand attention.

Scientists are closing the recycling gap

As solar installations soar, attention is turning to end-of-life management.

Solar panels are built to last 30 years or more and withstand harsh conditions. But they are not built to be taken apart into components. Their durability makes dismantling them for recycling difficult and expensive. That has raised concerns about a looming waste problem as early units reach retirement.

Globally, scientists are beginning to address the issue.

New research projects, from the EU to Australia, are developing more affordable and sustainable recycling methods, while some companies are designing panels with end-of-life recovery in mind. Repair and reuse are also gaining traction, keeping older panels in service instead of sending them to landfill.

Other renewables face similar hurdles. Although 80-95 per cent of wind turbine materials – including steel, copper, concrete and even some resins – can already be reused or recycled, scientists estimate that turbine waste could eclipse 43 million tonnes by 2050.

That makes the rapid adoption of these technologies all the more urgent.

The MIT researchers noted that while most solar panel innovations originated in research labs or by industry titans, many of the systemic innovations that spurred further growth and development were spearheaded by governments.

“Through this retrospective analysis, you learn something valuable for future strategy,” says Trancik. “It is also useful to know what adjacent sectors may help support improvement in a particular technology.”

That means sustaining the conditions that allowed solar power to absorb innovations and ensuring the next leap forward is as impactful as the last.