Solar PV Maturity Leaves Value in Firming Tech
- ORGEL
- Jan 20
- 1 min read
Updated: Jan 24
Our January 6th article discussed the nature of price declines of emerging energy technologies. After a technology advances out of the initial stages, the theory of experience curves breaks down, and the technology becomes commoditized. The most recent Levelized Cost of Energy analysis from Lazard, demonstrates consistent early-stage declines in solar PV prices, followed by overall stability within a constrained range over the last 10 years.
Solar PV pricing history shows that the continual price declines are over, and the industry has commoditized. This mature status is characterized by limited differentiation of suppliers, competition driven by price instead of features, and tight profit margins. Additionally, the dependent variable in production pricing is largely tied to the price of the input commodities, and changes in input prices are quickly reflected in final sale prices.
The next wave in value creation for solar PV is to firm the technology and to mitigate the issue of intermittency. For developers, using a battery as a temporary storage location for solar PV can dramatically improve the economics of the technology. Dispatching battery energy into the grid in the late afternoon and into the evening can generally fetch the highest prices from grid operators. The theoretical maximum solar PV efficiency is within reach, and therefore, the search for additional value creation and subsequent investment should occur beyond the panels themselves.
Lazard Inc. (2025). Lazard’s Levelized Cost of Energy+ (LCOE+) — Version 18.0. https://www.lazard.com/media/uounhon4/lazards-lcoeplus-june-2025.pdf
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