A new Massachusetts Institute of Technology (MIT) study traces 81 unique innovations behind a dramatic 99% drop in solar panel costs over the past 50 years. Interestingly, the research shows that a majority of the key innovations originated outside the solar sector.
These range from advances in semiconductor fabrication, metallurgy, antireflective coated glass manufacturing, oil and gas drilling, construction processes, and even the implementation of fully online permitting interfaces.
“Our results show just how intricate the process of cost improvement is, and how much scientific and engineering advances, often at a very basic level, are at the heart of these cost reductions. A lot of knowledge was drawn from different domains and industries, and this network of knowledge is what makes these technologies improve,” said the study’s Senior Author and a Professor in MIT’s Institute for Data, Systems, and Society, Jessika Trancik.
To identify these innovations, the research team combined its quantitative cost model with a detailed, qualitative analysis of the key innovations that impacted the cost of PV system materials, manufacturing steps, and deployment processes, while tracking industry history and expert input.
Researchers studied PV module costs and balance of system (BOS) costs separately and found a wide variety of innovations that influenced costs. Innovations reducing PV module costs mainly improved manufacturing tools and material quality, while those affecting BOS costs focused on component design, integration, automation, digitalization, and standardization.
“Often, it comes down to delays. Time is money, and if you have delays on construction sites and unpredictable processes, that affects these balance-of-system costs,” said Trancik.
Most innovations covered by the MIT research targeted PV hardware, but some addressed ‘soft technologies’ such as speeding up permitting and improving collaboration. The framework highlights knowledge spillovers between technologies, showing how PV benefits from advances in related industries like semiconductors and electronics, and underscores the role of public institutions in supporting testing, permitting, and training.
The MIT team clarifies that the innovations were selected through literature review and expert input, focusing not on a complete list but on those that explain why costs declined. This approach serves as a starting point for a broader study.
Nevertheless, they see these findings as helping renewable energy companies make more effective R&D investment decisions, while policymakers can use the same to identify areas to prioritize growth in manufacturing and deployment.
The complete MIT research titled Nature of innovations affecting photovoltaic system costs was recently published in the journal PLOS.One.
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