Are Solar Panels Improving?

Are solar panels improving?

Solar panels, also known as photovoltaic (PV) panels, are devices that convert sunlight into electricity using semiconducting materials. They consist of photovoltaic cells made from materials like silicon that absorb photons from sunlight and release electrons, generating an electric current. Though the discovery of the photovoltaic effect dates back to the 19th century, the first commercial silicon solar cell was created in 1954 at Bell Labs. Since then, solar panels have come a long way in improving efficiency and reducing costs.

In recent years, solar panel technology has improved dramatically thanks to advances in materials, manufacturing processes, and panel design. Some key improvements include increased solar cell efficiency, lower costs per watt, better racking and wiring systems, and extended lifespans. As a result, solar power generation has expanded exponentially over the past decade, with more homes, businesses and utilities adopting solar energy.

Efficiency Improvements

The efficiency of solar panels has improved significantly over the past few decades. In the 1970s, the first commercial solar panels only had efficiencies of around 6-8% (Source). This means that only 6-8% of the sunlight hitting the panels was converted into usable electricity. Today’s market-leading solar panels now achieve efficiencies of 20-23%, representing around a 3x increase.

According to EnergySage, in the late 1970s, solar panels cost over $76 per watt. Now, prices have declined to around $0.70 per watt for an average-sized residential system (Source). This dramatic cost reduction has been enabled by efficiency improvements as well as economies of scale in manufacturing.

These efficiency gains have been driven by innovations in solar cell materials and designs. Some key advances include the development of polycrystalline silicon cells in the 1980s, thin-film technologies like cadmium telluride in the 1990s, and more recently, the commercialization of more complex multi-junction solar cells. Continued research and development promises to unlock further efficiency improvements in the future.

Cost Reductions

The cost of solar panels has fallen dramatically over the past decade. According to CNET, the average cost for a residential solar system has dropped from around $50,000 in 2010 to around $20,000 today. For commercial installations, costs have fallen from an average of $5 per watt in 2010 to under $1 per watt today.

Several factors have driven down solar panel costs over the years. Improvements in manufacturing techniques and economies of scale have made production more efficient. Polysilicon, the main raw material for solar cells, has also dropped in price by around 80% since 2008. Additionally, streamlined installation processes have reduced labor costs.

Experts predict solar panel pricing will continue to decrease by around 5-7% annually. As technology advances, production expands, and companies scale, the cost of solar power is expected to become increasingly competitive with conventional energy sources.

Storage Capabilities

Solar energy can be stored using battery systems to provide power even when the sun isn’t shining. This allows solar power to be used at night and during cloudy weather. Battery storage extends the usability and reliability of solar photovoltaic systems.

Lithium-ion batteries are the most common type used for storing solar energy in homes and businesses. Companies like Tesla offer the Powerwall battery system that can store solar energy for use when needed. The Powerwall can provide backup power to a home when the grid goes down. According to Tesla, over 1 million Powerwall units have been deployed worldwide as of 2021.

Solar and storage installations are becoming more popular for both homes and large facilities. Apple’s headquarters in Cupertino, California has one of the largest on-site solar and battery projects in the world. The 17.5-megawatt solar installation is paired with lithium-ion battery storage to extend the use of the generated solar electricity.

Having energy storage capacity allows solar power to be dispatched whenever required, even without sunlight. This makes solar a much more reliable energy solution alongside or in place of conventional power grids.

Improved Materials

In recent years, researchers have developed new solar cell materials like perovskites that can achieve higher efficiency ratings than traditional silicon solar cells. Perovskite solar cells have recorded lab efficiency levels above 25%, compared to around 20% for silicon cells (1). However, perovskites are not yet ready for wide-scale commercialization.

While perovskites offer better efficiency, they come with higher production costs and stability issues compared to silicon. Perovskites degrade more quickly when exposed to moisture and high temperatures (2). More R&D is needed to improve durability and manufacturability before perovskites can challenge silicon’s dominance in the solar market.

Looking ahead, tandem or multi-junction cells that layer perovskites on top of silicon cells could potentially achieve lab efficiency levels above 30%. Commercialization of these “miracle” tandem cells in the 2020s and beyond could considerably boost solar panel productivity (2). Further material innovations and nanotechnology applications will open up new horizons for solar cell efficiency and performance.



Increasing Adoption

The adoption of solar power has been rapidly increasing in recent years. According to the Solar Energy Industries Association (SEIA), the average annual growth rate for solar has been 24% in the last decade alone 1. Solar is expected to continue this strong growth, with forecasts predicting home solar installations growing by 6,000 to 7,000 MW per year between 2023 and 2027 2.

Policy support has been a major driver of solar adoption. Federal tax credits, state renewable portfolio standards, and net metering policies have made solar power more affordable and attractive. The recent passing of the Inflation Reduction Act extended federal tax credits for residential and commercial solar through 2032 3.

In the corporate sector, major companies like Apple, Amazon, Target, and Walmart have been installing solar arrays on their facilities to reduce operating costs and meet sustainability goals. Residential solar has also grown tremendously, with over 3 million homes in the U.S. now powered by solar panels as of 2021.

Environmental Benefits

Solar power produces zero emissions during generation itself, and life-cycle assessments show that it has a smaller carbon footprint compared to fossil fuels. According to the UN Chronicle, solar energy is a key part of a low-carbon energy strategy to fight climate change in the 21st century. The Chronicle states, “Solar power produces no emissions during generation itself, and life-cycle assessments clearly demonstrate that it has a smaller carbon footprint from ‘cradle-to grave’ than fossil-fuel-based electricity generation” (The UN Chronicle).

Recent research from Columbia University found that solar panels reduce CO2 emissions more per acre than trees or other crops. The study states, “an acre of solar panels installed to replace natural gas reduces approximately 208 to 236 times more carbon dioxide per year than an acre of U.S. forests, and over 100 times more than corn ethanol” (Columbia Climate School). Solar’s ability to substantially cut CO2 emissions makes it a critical tool in mitigating climate change and transitioning to a low-carbon future.

Future Outlook

The future looks bright for solar energy. According to the U.S. Department of Energy’s SunShot 2030 goals, utility-scale solar costs are projected to decrease by 50% between 2020 and 2030. The Solar Energy Industries Association aims even higher, with a goal of solar providing 30% of U.S. electricity generation by 2030, compared to just 3% in 2020. Lower costs and improved efficiency are driving increased adoption.

Global energy agencies predict strong growth for solar in the coming decades. The International Energy Agency forecasts that solar will account for 80% of new power generation capacity through 2030. However, challenges remain to reach the full potential of solar technology. Areas like energy storage, grid integration, and permitting issues must be addressed. With focused policies and research efforts, solar is poised to be a major pillar of a clean energy economy.

Experts emphasize that sustained commitment will be key. As per a McKinsey & Company report, “realizing solar’s potential will require governments and businesses to continue prioritizing its rapid scaling.” With concerted efforts to reduce costs and expand infrastructure, solar can unlock immense environmental and economic benefits worldwide.


In summary, it’s clear that solar panels are continuously improving in major ways. Efficiency has steadily increased over the past decade, allowing panels to convert more sunlight into usable energy. Costs have dramatically declined as production expands and technology matures. Energy storage solutions are now enabling solar power to be dispatched whenever needed, not just when the sun is shining. Materials advances have increased solar cell lifespans and opened up new possibilities like flexible solar panels. Adoption continues to grow rapidly as solar power reaches pricing parity with fossil fuels in more markets. And solar delivers significant environmental benefits by generating clean, renewable electricity.

Looking ahead, solar power is poised for even greater growth and innovation. With expanded capacity, continued advancements and creative solutions to storage and transmission challenges, solar appears well on its way to becoming a primary source of energy worldwide. The future is bright for this rapidly improving technology that harnesses the sun’s limitless power.


Lazard. (2020). Lazard’s Levelized Cost of Energy Analysis – Version 14.0. Lazard.

SEIA (Solar Energy Industries Association). (2020). Solar Industry Research Data.

EIA (U.S. Energy Information Administration). (2020). Levelized Costs of New Generation Resources in the Annual Energy Outlook 2020.

NREL (National Renewable Energy Laboratory). (2020). Best Research-Cell Efficiency Chart.

IRENA (International Renewable Energy Agency). (2020). Renewable Power Generation Costs in 2019.

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