How Low Will Photovoltaic Prices Go?

Summary of a Near Zero Expert Elicitation

Steve Davis
Tuesday, December 11, 2012

Prices for photovoltaic modules—the part of solar panels that turn sunlight into electricity—are expected to continue falling, in line with the long-term trend that has persisted since 1980, according to Near Zero's survey of experts. On average, global installations per year are not expected to increase much from the record level in 2011, but the total installed solar capacity is expected to soar to 300 gigawatts by 2018, and 600 GW by 2025.

Executive Summary

Solar power—electricity from photovoltaic panels—is now becoming competitive in certain markets, such as in Germany during the hours of peak demand. But in most other markets, it is still too expensive to compete with older, established sources of power such as coal-fired power plants. In forecasting the future of the solar power industry, and the expansion of clean energy in general, the price of solar power in the next 10 to 15 years will be a crucial factor—perhaps the deciding factor.

To get a sense of what future prices for solar power are likely to be, as well as other challenges and bottlenecks that the industry faces, Near Zero conducted a formal, quantitative survey (an “expert elicitation”) that drew on from industry, universities, and national labs. Such surveys are a means of formally collecting expert judgments on a topic. By aggregating forecasts made independently by a variety of experts, the results reflect the collective wisdom of the group about how the solar power industry is most likely to develop, and also help to characterize the range of uncertainty about the future.

Solar module prices will likely continue
to fall - but this will require more
investment in basic research.

The results of Near Zero’s survey, conducted in 2011 and 2012, suggest that prices for solar power will continue to fall, in keeping with a long-term trend that has prevailed since 1980. This will bring down the price of solar power sufficiently that it will be far more competitive than it is today. The experts forecast a large expansion of the amount of installed solar power, increasing more than 10 times over the decade from 2010 to 2020, an expansion that will continue at a similar rate until at least 2025.

However, this success story is dependent on solar power prices continuing to fall, which will require continued and possibly increased levels of spending on research and development, the experts said. If solar power prices continue to fall as expected in the survey, then the large expansion of installed solar power could be achieved while requiring spending less each year than the world currently is spending on solar power installations. But if prices were to hold steady rather than falling, then the same expansion of solar power, over the period 2012 to 2025, would cost at least 50% more—adding up to several hundred billion dollars.


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This report was based on the discussion of 21 experts.
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