It is amazing how far solar panels have come in such a short space of time, going from an important but expensive addition to a diverse energy supply to something that has grown so exponentially that at times they have generated far more energy than required.
At several points, the raw price of electricity has dipped below zero, which may not necessarily translate to extremely cheap energy yet, but will once storage battery capacity catches up to the efficient generation of solar panels installed by experts.
This is a remarkable change from 50 years ago when the total cost of solar power was over £70 per Watt, which is over 900 times the current market energy price.
Why is this the case? One answer can be found in Swanson’s Law, a rule of thumb that shows the virtuous cycle of capacity, supply and demand.
What is Swanson’s Law?
Swanson’s Law says that the price of solar panels goes down by about half every two years. This means solar panels keep getting cheaper as time passes.
Why Does Swanson’s Law Happen?
As more solar panels are made, companies find better ways to make them faster and cheaper. This helps lower the cost for everyone.
What Does Swanson’s Law Mean for Solar Panels?
Because solar panels are getting cheaper, more people can afford to use solar power. This helps more homes and businesses switch to clean energy.
How Does Swanson’s Law Help the Environment?
Lower prices mean more solar panels get installed, which reduces pollution and helps fight climate change by using clean energy instead of fossil fuels.
Explaining Swanson’s Law
The concept of Swanson’s Law is both easy to describe and difficult to explain, with the term first published in an article by The Economist in 2012.
The basic core of the concept is that whenever the industry capacity for solar power doubles, the cost of solar cells falls by 20 per cent, which at present rates of industry growth means that the overall cost of buying solar panels drops by three-quarters every decade.
The concept is similar in construction to Moore’s Law, which suggests that the number of transistors on a microchip doubles every two years for the same cost. This law became an explicit goal for semiconductor manufacturers and led to the powerful, tiny computers that dominate the world today.
There is also the more general Wright’s law, which suggests that as manufacturing volume doubles, there will be a reduction in time and cost fixed for a particular item and a particular industry.
The name itself comes from Richard Swanson, an Iowa businessman who founded SunPower Corporation, a manufacturer of solar cells.
It is important to note that production capacity alone is not the only factor in the lower cost of electricity generated by solar panels.
The switch to polysilicone rather than monosilicone solar cells helped to lower costs through efficient economies of scale, even if mono panels have become more desirable for their higher efficiency once crystalline silicone started to become a major part of the market.
Rather unusually, one of the biggest factors in the rapid fall of solar panel prices was flat-screen televisions.
In the 1970s, the vast majority of television screens were rounded squares designed for use with cathode-ray tube monitors, but the switch to LCDs and flat screens meant that there were efficient methods to produce standard sizes of glass shields for solar panels, as well as secure housings.
The combination of cheaper production, increased manufacturing capacity creating better economies of scale and the improved efficiencies in the design of solar cells themselves has reduced the cost of electricity generated by them by over 99 per cent between 1976 and 2020.
For at least the short term, this trend is only set to continue, and will fundamentally change an energy market designed around fossil gas on its head.
