Inexpensive Solar Panels Are Essential for the Energy Transition.
The global average price for solar panels has peaked and is now falling, contributing to the affordability of clean energy. The drop in prices is attributed to an increase in the supply of silicon, a key component of solar panels. The oversupply of polysilicon, mainly from Chinese factories, has led to a correction in panel prices worldwide. However, in the United States, prices remain higher due to tariffs and trade barriers on solar components from China. The Inflation Reduction Act (IRA) in the U.S. offers incentives for clean energy manufacturing plants, but it will take time for the domestic supply to ramp up. While the cost of solar panels is just one aspect of building a solar array, the drop in prices is significant considering the projected increase in renewable power installation globally. The drop in global panel prices will eventually impact the U.S. market, but the timeline for this transition is still uncertain.