How Solar Panels Got So Cheap

Once upon a time, solar panels were far too expensive to be mainstream. They were more commonly found on space stations, satellites, and calculators than on the roofs of ordinary family homes.

While solar panels still aren’t pervasive, they have steadily won over people who recognize the financial and environmental benefits of investing in renewable energy. Annual installation of solar panels in the United States jumped from 852 megawatts in 2010 to 15,007 megawatts in 2016, according to the Solar Energy Industries Association and GTM Research.

The falling price of solar panels has played a major role in that growth.

Since 2010, the average wholesale price for solar panels dove 80 percent to about $0.35 per watt, says Hugh Bromley, an analyst with Bloomberg New Energy Finance.

The story behind that decline is filled with ambitious entrepreneurs who jockeyed to develop low-cost technology and intense competition that led to international trade disputes and dozens of bankruptcies. At the same time, wrong bets by investors delivered zero returns on billions of dollars in investments.

Through these changes emerged an industry that has turned solar panels into a commodity produced in large-scale factories.

“The main reason why we have low prices today is because the fragmented industry has consolidated around a single tech,” says Bromley. “That technology is produced by hundreds of firms around the world, so they are able to tap into the…