How is that? Why are the costs of renewable energy declining so rapidly?

The costs of fossil fuels and nuclear power are driven primarily by two factors. These are the price of the fuel they burn and the operating cost of the power plant. Renewable power plants are different. Pay per fuel. Their fuel doesn't have to be dug up from the ground, their fuel – wind and sunlight – comes to them. It is the cost of the power plant, and the cost of the technology itself, that drives the cost of renewable energy. It is necessary to understand. Let's rewind a little bit.

The first price of viable solar technology is his 1956. At the time, 1 watt of solar power cost $1,865 (adjusted for inflation and the 2019 prices). Today, a single solar panel, such as the one that homeowners put on their roofs, produces about 320 watts of power. Million Dollar Single Panel – Solar was clearly not competitive with fossil fuels.

So why didn't the story of solar technology end there?

There are two reasons why solar power has survived and become the cheapest source of electricity in the world.

Solar technology was also used at a very high price. It is truly a technology born from outer space. The first practical use of solar energy was to power the satellite Vanguard I satellite in 1958.

It was in this tech niche that someone was willing to pay for solar technology, even at this very high price. has fallen in price. More production has given us the opportunity to learn how to improve our production processes. Initial demand in the high-tech sector led to the production of solar technology, and this initial production started a virtuous cycle of increasing demand and falling prices.

The visualization shows this mechanism. To meet increasing demand, more solar panels are used, leading to lower prices. With these low prices, the technology is becoming cheaper in new applications, which means demand is increasing. It's in a feedback loop.