Geopolitical uncertainty, supply shortages and China’s recent tax reform are threatening to send the prices of solar panels soaring. But, is it really that severe?
Once an extortionate investment reserved for the ‘eco-elite’, solar has rapidly become one of the cheapest electricity sources in the world. But, are the tables about to turn?
Solar photovoltaic (PV) panels, composed of individual solar cells that convert sunlight into electricity, have plummeted in price by a staggering 90 per cent in the last decade. According to Our World In Data, costs have dropped by around 20 per cent every time the global cumulative capacity doubles.
At the same time, the price of solar batteries, which allow households to store electricity during peak times, have also decreased by 90 per cent since 2010 due to advances in battery chemistry and manufacturing.
The EU now describes solar as a “shining star” of Europe’s clean transition, accounting for almost a quarter (23.4 per cent) of its electricity consumption in 2024. In June last year, the sun was the main source of the electricity generated in the EU.
Amid the war on Iran, solar is helping to cushion households from volatile fossil fuel shocks. Recent analysis found that harnessing sunlight for power saved Europe more than €100 million per day throughout March by reducing gas imports.
If prices remain high, due to Iran’s stranglehold on the Strait of Hormuz, experts say these savings could reach €67.5 billion by the end of the year.
The ongoing conflict in the Middle East has also bolstered interest in household electrification, with multiple energy firms across Europe reporting a recent spike in solar panel and solar battery inquiries.
However, as demand for solar panels soars, foreign tax policy, the price of silver and other influences could soon ignite a price surge.
Read more: EuroNews
