The cost of solar and battery energy storage is a hotly discussed topic -it always has been. Undoubtedly, the price of solar and energy storage has dropped from where it was 5 or 10 years ago. But pricing in recent years and months has been mostly stable. Will prices hold? Will they fall? The answer is far from straightforward. But we’ll do our best here, dear rear, to break it down in as few words as possible! 🙂

The Big Picture: Solar Costs Over Time

The cost of solar PV (photovoltaic) panels has decreased significantly over time. For instance, in 2010, the national average installed cost for residential solar-only installations was about $7.50/watt. Compare that with the current average 2025 solar-only price of about $3/watt before tax credits or other incentives. The decrease in cost has been led mainly through economies of scale—simply more panels made and sold- and improvements over time in the mining and manufacturing processes of silicon PV cells and other components required to build solar panels.

The cost of battery storage has also dropped precipitously over the past 10 years. In 2010, the average cost of battery storage was between $1000-$1500/kWh (Kilowatt/hour). In 2025, the cost for batteries using the latest chemistries—LFP (Lithium Ferrophosphate) and LiFiPO4 (Lithium Iron Phosphate)—is now down to between $200-$400 per kilowatt/hr. So, roughly a 75% drop in prices in 15 years.

Emergent new breakthroughs in materials science and R&D related to solar PV and battery chemistries are on the way to market. These products will be easier to manufacture and use expensive and easier to obtain raw materials. This will further push down the cost of current products as these new product categories begin to enter the market in late 2025 and beyond.

But What’s Driving Costs Up in 2024 & Beyond?

But while prices have dropped, the decline has slowed in recent years. And now, beginning late last year, we see various competing market forces pushing and pulling on renewable energy technology pricing. In some cases, the costs and prices have been going up.

So what gives?

Well, like I said, it’s a bit complicated, but here’s the bullet point summary of causes – these apply to both solar and battery energy storage :

• Global supply chain pressure and uncertainty are adding risk and driving down demand, which is ultimately passed on to the consumer.
• Global macroeconomic forces (inflation) and trade policies (tariffs) are further increasing uncertainty and component costs for both technology vendors and solar installation firms, which are also passed on to the consumer.
• The cost of basic construction materials and labor has also gone up since the pandemic, which (you guessed it) is passed on to the consumer as higher system pricing.
• Aside from essential component and system costs, solar PV ROI (return on investment) has been pushed out for most consumers because the electric utilities have pulled back on the prices they are willing to pay for the excess energy you export to the grid. This means your system can also take longer to pay for itself.

The Flip Side: What’s Keeping Prices Down?

But other strong forces are pulling the price down, even as the upward pressure mentioned in the section above doesn’t seem to be going away anytime soon. There are interesting dynamics at play here.

Here are the bullet points:

• Economies of scale almost always drive prices downward as more solar and energy storage infrastructure is installed around the world. It’s basic supply-demand economics.
• Advances in materials science and novel chemistries for solar panels and batteries will use much simpler to mine/source, less expensive raw materials.
• Advances and refinements in manufacturing and logistics processes continue to allow factories to produce components more efficiently, mefficientlycientlyexefficiently expensive
• Growing competition between technology vendors is also helping to push down prices – more basic supply-demand economic principles here.
• Of course, federal, state, and local incentives have often further helped reduce the overall cost of these systems. *Hopefully, the Fed doesn’t mess around and begin cutting incentives for renewables under this current administration!

Are Solar Prices Expected to Rise or Fall?

Nobody has the magic crystal ball, right? But we can make informed guesses and forecast potential/likely outcomes here.

Industry analysts seem to mostly agree that prices for current tech (silicon-based solar PV panels and lithium-based batteries) will remain mostly flat in 2025 with some fluctuation. They’re guessing the fluctuations in retail pricing will stay at 5-10% of where they are today. However, we aren’t making any bets with looming trade wars and possible incoming bilateral tariffs.