Solar Module Costs Hit 27 Cents per Watt as Project Returns Splinter
An 87% total installed cost decline since 2010 masks widening gaps between markets capturing cheap panels and those absorbing costs elsewhere.
Solar module costs have fallen from $1 per watt to 27 cents, Bloomberg reported. IRENA puts total solar PV installed costs down 87% since 2010. Mass manufacturing did that. BloombergNEF now projects solar will become the world's largest electricity source by 2035, with prices falling a further 30% by then.7,1
Project economics run on more than module prices. In Australia, power prices almost halved in the second quarter of 2026 as renewables and batteries displaced gas in the main grid, with BloombergNEF analyst Sahaj Sood noting that batteries are increasingly displacing gas as the day's principal balancing tool for intraday variability in renewable generation. Yet the Australian Renewable Energy Agency's targets for ultra-low-cost solar construction remain out of reach. Inflation, grid connection requirements and labour pressures are absorbing the panel savings before they reach project economics.4,5
The Chinese market that produced those cheap modules is itself contracting. China added 41.4 GW in Q1 2026, down 31% from Q1 2025. March 2026 additions fell 56% year-on-year to 8.9 GW, according to CREA, the Finland-based Centre for Research on Energy and Clean Air.2
April 2026 offered only a modest recovery to 9.5 GW, still far below the 45 GW added in April 2025, when developers rushed installations ahead of a major change in China's solar output pricing mechanism. Chinese solar cell production contracted 25.6% year-on-year in April 2026, CREA data show.2
China also removed export tax refunds on solar products on April 1, 2026, a policy shift analysts expected would raise module prices and slow export volumes materially. That repricing has been slower to materialise than forecast.2
The US market faces structurally different constraints. Trump's Section 232 tariffs, authorised under statute giving the president broad authority over strategic industries after a Commerce Department investigation, will raise costs for US solar projects relying on imported cells, wafers and ingots. Domestic manufacturing cannot close the gap. The US will remain dependent on cell imports even as the tariffs inflate project costs.6
Data center demand is frequently cited as the growth driver most likely to scale solar deployment. BloombergNEF is sceptical it will displace gas and coal in that segment. The firm expects fossil fuels to supply 51% of incremental generation for data centers by 2050, given that gas and coal can run continuously without long-duration storage. Google's $1 billion commitment to 100-hour iron-air batteries from Form Energy, disclosed in connection with a data center project in May 2026, is a bet on storage bridging that gap — but BloombergNEF's baseline suggests this is not yet the sector-wide approach.1
Australia's research pipeline targets a longer-term fix. ARENA has extended funding for the Australian Centre for Advanced Photovoltaics to 2032 to support next-generation cell research. The programme targets research-scale tandem solar cell efficiencies of nearly 40%, commercial module efficiencies around 35%, and module lifetimes of up to 40 years, gains that, if achieved commercially, would shift the cost conversation from panel price per watt to system lifetime cost per megawatt-hour.3
The module price data are real. But the split between markets that can exploit them and those that cannot is widening. In China, the domestic installation base that scaled manufacturing is shrinking. In the US, tariffs inflate the effective cost of the very panels that have cheapened globally. In Australia, grid and labour infrastructure is not keeping pace. How long manufacturers hold prices near 27 cents without the volume base that drove them there is the figure project developers and power buyers will be tracking.2,6,5