MIT Study Highlights Causes of Declining Solar Energy Costs

Using a quantitative method and an advanced conceptual framework, MIT researchers were able to assess solar energy costs over time.


Over the past several decades, MIT researchers have been studying the rapidly declining costs of and renewable energies. One of their most recent studies evaluated and identified the reasons why solar costs have declined overall. Their results were highlighted in the December 2018 edition of Energy Policy and detail the once elusive reasons why solar energy costs have decreased so much in the past 40 years. Additionally, this particular study looked at which trends should be carried into the future or maximized in order for solar energy costs to decrease even more. 

Using a quantitative method and an advanced conceptual framework, MIT researchers were able to assess solar energy costs over time. Specifically, researchers began with a cost model that effectively broke down variables in solar energy costs and how those variables change over time. In a recent interview with CleanTechnica, one of the head researchers of the solar energy cost study, Dr. Göksin Kavlak, addressed the results of their studies and his assessment of the industry in the past, present, and future. 

The Influence of Research and Development 

One particular highlight of this solar energy cost study that sticks out is the focus on research and development or R&D contributions, both private and government-funded. From 1980-2012, researchers found that one of the most important factors to decreasing solar energy costs was the contributions offered by R&D Companies. Dr. Kavlak told CleanTechnica that R&D companies primarily drove device-level changes, meaning there was improvement made in overall production efficiency, silicon usage, and other device-level modifications. It was found that the contributions from R&D companies over the course of over two decades provided a significant reduction in overall solar energy costs. 

Differences in the way private verses government-funded R&D companies operate also contributed to the decrease in solar energy costs. When these organizations are not working hand-in-hand, government-funding is usually put towards the fundamental development of solar energy technology, while private funding typically has a much more focused or specific objective. 

Contributing Factors Identified 

In addition to specific funding sources for solar energy technology, MIT researchers looked at the specific variables that have lessened the costs overtime. Eight specific factors were identified. Silicon-usage, the price of silicon, efficiency, non-silicon building and production material costs, manufacturing location size, wafer area, production yield, and a final variable indicating depreciation of equipment, operation and maintenance costs, and electricity and labor costs. Over the course of a given year, all of these factors ultimately paint a picture of how and where exactly solar energy costs have been reduced. As researchers continue to track these variables, they predict that costs will continue to decline for solar energy. 

Guiding the Future of Solar Technology 

Researchers at MIT will continue to monitor and evaluate various factors in the solar energy realm that contribute to decreasing costs. With support from the U.S. Department of Energy through a generous grant to fund this solar energy cost research, more insights are likely to be discovered in coming years. Ultimately, the analysis of declining solar energy costs thus far will undoubtedly help multiple entities private and public sectors, as well as solar energy developers and engineers. 

As solar energy implementation increases and the demand for renewable energy becomes more apparent, these and other studies will likely guide manufacturers and developers in the future. Navigating solar energy technology is brand-new territory. The studies that come out of respected institutions like MIT are critical. A solid plan for the future of solar technology will be just as important as the solar technology itself. Without a clear framework explaining where solar technology costs have decreased the most, developers would be unable to make effective business and budget decisions.  

Addressing the inevitable solar energy challenges in the coming decades seems less daunting now. These and other studies are helping identify what is being done right and where, ultimately influencing the direction many solar energy companies will take now and in the near future. Declining costs and increased efficiency in solar energy procedures is great news for developers, researchers, and consumers alike. 



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