Figures last checked on 9 October 2026.
Two datasets published in the past 12 months put numbers on two sides of the same story. One, from the US Department of Energy’s solar cost-benchmarking program, shows how far the price of building a solar system has fallen since 2010. The other, from supply-chain tracker Sinovoltaics, shows why: a global manufacturing base that keeps growing faster than demand, pushing module prices down and squeezing the companies that make them.
The dataset
The cost figures come from “Documenting 15 Years of Reductions in U.S. Solar Photovoltaic System Costs,” a report published in January 2025 by the US national laboratory that runs the Department of Energy’s solar cost-benchmarking program (the lab operated as the National Renewable Energy Laboratory, or NREL, during the period the report covers and has since been renamed the National Laboratory of the Rockies). The report uses bottom-up cost models built from component prices, installer data and industry interviews, benchmarked annually since 2010, to track installed system costs and levelized cost of electricity (LCOE) for residential, commercial and utility-scale solar in the United States.
The manufacturing-capacity figures come from Sinovoltaics’ Europe Solar Supply Chain Map, Edition 1, 2026, published in August 2026. The firm tracks operational and announced solar manufacturing capacity, polysilicon through to finished modules, across roughly 25 countries in Europe and the wider Mediterranean region.
How far US solar costs have fallen
Between 2010 and 2024, the cost benchmarks for PV systems in 2024 U.S. dollars decreased 65% for residential systems, 77% for commercial systems, and 83% for utility-scale, one-axis tracking systems. A substantial portion of these reductions can be attributed to decreases in hardware costs, including modules, inverters, and balance of system hardware, with module prices alone dropping by roughly 90% over this period. Levelized cost of electricity fell by similar margins: the benchmark LCOE in 2024 dollars decreased by 86% for utility-scale PV systems, 84% for commercial PV systems, and 76% for residential PV systems between 2010 and 2024.
In dollar terms, the lab’s modeled benchmark for a 100-megawatt-dc utility-scale system with single-axis tracking decreased 83%, from $6.94 per watt in 2010 to $1.15 per watt in 2024, driven primarily by lower module costs, market maturation, economies of scale, and improvement in average module efficiencies. A comparable commercial-scale benchmark decreased 77%, from $6.83 per watt in 2010 to $1.55 per watt in 2024.
| Sector | Installed cost change, 2010-2024 | Benchmark LCOE change, 2010-2024 |
|---|---|---|
| Residential | -65% | -76% |
| Commercial | -77% | -84% |
| Utility-scale (one-axis tracking) | -83% | -86% |
Why prices keep falling: a manufacturing base built for more
The cost declines coincide with, and are partly explained by, a solar manufacturing industry that has built far more capacity than the market currently needs. Edurne Zoco, head of technologies and supply chains at S&P Global Energy, told pv magazine in an interview published on 8 October 2026 that the global PV supply chain will remain oversupplied over the next 12 to 24 months, even as consolidation slowly picks up, because China alone has more than 900 GW of annual cell production capacity while global demand is about 590 GW. She said she expects continued consolidation and low global prices, but increasingly divergent prices across regions.
That overcapacity has already hit manufacturer finances. According to Zoco, average margins at leading module makers fell from about 9% in 2023 to negative levels in 2025, as solar moved furthest along a consolidation curve that inverter and battery storage makers are only beginning to follow.
Europe’s manufacturing map: Turkey ahead of the EU
The regional picture inside Europe illustrates the same dynamic at a smaller scale. According to Sinovoltaics’ August 2026 update, Turkey has 13.2 GW of operational solar module manufacturing capacity, exceeding the 9.7 GW combined capacity of Italy, Germany, Spain, France, and the Netherlands, which together account for the European Union’s module-making base. The tracker, which covers facilities throughout the solar value chain across Europe, the Mediterranean and Türkiye, puts current European PV module manufacturing capacity at 24.2 GW, with announced projects potentially raising total capacity to approximately 88.2 GW by 2027-2030.
Module assembly is only one link in the chain. EU cell and wafer capacity stands at only 1.2 GW and 0.2 GW respectively, excluding Turkey, meaning most European-assembled modules still depend on imported cells and wafers, largely from China. Turkey’s own cell base is concentrated: Sinovoltaics counts roughly 2.5 GW of operational cell capacity there, held mostly by two producers.
How to read these numbers
- Installed cost versus LCOE. Installed cost ($/W direct current) measures what it costs to build a system. Levelized cost of electricity (cents/kWh) spreads that capital cost, plus financing and operating costs, over the electricity the system is expected to generate across its lifetime. The two can move at different rates because financing conditions, degradation and capacity factors change independently of hardware prices.
- Nominal versus real dollars. The NREL/NLR benchmarks are expressed in 2024 US dollars throughout the 2010-2024 series, so the declines reported here are inflation-adjusted (real) changes, not simply nominal price drops.
- Capacity versus generation. Manufacturing figures in gigawatts (GW) describe nameplate production capacity, how much a factory could make in a year running at full output, not how much electricity any solar system actually generates. Generation is measured separately in megawatt-hours (MWh) or terawatt-hours (TWh).
- Operational versus announced. Sinovoltaics distinguishes capacity that is currently running (“operational” or “current”) from capacity still at the planning or construction stage (“announced”). The 88.2 GW figure for 2027-2030 is a pipeline total, not installed capacity, and industry trackers generally note that a large share of announced capacity does not get built on schedule or at all.
Closing note
The two datasets describe the same market from different ends. US buyers of solar systems have benefited from a manufacturing base that expanded faster than global demand, pushing hardware costs down year after year. The same overcapacity that lowered buyers’ costs has pushed manufacturer margins into negative territory in some markets, according to S&P Global’s Zoco, a trend regulators and industry groups in Europe and the United States are now citing as they debate local-content rules and trade measures for solar manufacturing.
Where to find the data
- Source: Documenting 15 Years of Reductions in U.S. Solar Photovoltaic System Costs (NREL/National Laboratory of the Rockies, January 2025)
- Source: Solar Installed System Cost Analysis, National Laboratory of the Rockies
- Source: Solar Photovoltaic System Cost Benchmarks, US Department of Energy
- Source: Europe Solar Supply Chain Map 2026, Sinovoltaics
- Source: Türkiye’s PV module manufacturing capacity tops 13.2 GW, pv magazine Global
- Source: Global PV oversupply accelerates consolidation, regional price divergence, pv magazine Global