Solar Energy Is Dropping in Price for Surprising Reasons
An MIT-led study revealed the hidden contributors to plummeting solar costs, and many had nothing to do with solar at all. The drop in solar energy costs over the past five
Analyzing millions of transaction-level data points from homeowners on EnergySage, it highlighted a clear milestone for solar panels: The average price had dropped 30% year-over-year in 2024. According to the report, the median quoted price of solar decreased for the third year in a row, hitting its lowest in recorded data at $2.50 per watt.
This states that the cost of technology falls consistently as the cumulative production of that technology increases. The chart shows the perfect example of this for solar power. This data comes from the International Renewable Agency, Greg Nemet, and Doyne Farmer & François Lafond.
Solar energy has seen a dramatic transformation over the past few decades, making it one of the most accessible and efficient sources of renewable energy. Advances in technology, government incentives, and increased demand have driven down the cost of solar panels and improved solar panel efficiency over time.
For homeowners considering residential solar panels in 2025, the cost is more affordable than ever. The Federal Solar Tax Credit allows homeowners to deduct 30% of their installation costs from their taxes, making solar panels an even more appealing investment.
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