Yes, solar prices are almost certainly going to keep falling. The forces driving costs down over the past two decades, massive manufacturing scale, improving technology, and cheaper raw materials, are all still accelerating. Since 1998, the average price of a solar module has dropped from nearly $5 per watt to well under $1 per watt, and the current supply glut in global manufacturing suggests further declines ahead. The bigger question for most people isn’t whether prices will drop, but whether waiting actually saves you money once tax credits and rising electricity costs are factored in.
How Far Prices Have Already Fallen
Solar panel costs have followed one of the steepest price curves of any energy technology in history. In 1998, a residential solar module cost about $4.90 per watt in inflation-adjusted dollars. By 2011, that had fallen to $1.28 per watt. By 2013, the global average selling price hit roughly $0.74 per watt. Today, wholesale module prices sit even lower, particularly for panels sourced from Asian manufacturers.
Installed system prices (which include panels, inverters, wiring, labor, and permits) fell 5% to 7% per year on average between 1998 and 2011, with some years seeing drops of 11% to 14%. The pattern has continued since then, though at a slower pace because hardware now makes up a smaller share of total system cost. Labor, permitting, and customer acquisition costs don’t shrink the way silicon does.
The Global Oversupply Problem
The single biggest reason to expect continued price drops is a staggering mismatch between how many panels the world can make and how many the world actually needs. China’s solar module manufacturing capacity reached 1.8 terawatts in 2025. Global demand for new installations that same year was around 350 gigawatts, roughly one-fifth of available production capacity.
That kind of oversupply crushes prices. Manufacturers compete aggressively on cost just to keep factories running, which pushes wholesale module prices lower even when it means razor-thin or negative profit margins. China’s National Energy Administration has warned that if expansion continues unchecked, manufacturing capacity could double by 2030, deepening the glut further. For buyers, this translates directly into cheaper panels.
The downside of this dynamic is that some manufacturers will go bankrupt, which could eventually reduce supply and stabilize prices. But that shakeout hasn’t happened yet, and the scale of overcapacity suggests low hardware prices for at least the next several years.
Raw Material Costs Vary by Region
Polysilicon, the purified silicon used to make solar cells, is the most important raw material in panel manufacturing. Its price varies dramatically depending on where it’s produced. In Northeast Asia (primarily China), polysilicon cost about $7.95 per kilogram in early 2026. In Europe, that same material cost $20.68 per kilogram. In North America, it was $28.17 per kilogram.
The massive cost advantage in Asian polysilicon production is a key reason Chinese-made panels are so much cheaper. As long as that gap persists, panels manufactured in or sourced from Asia will continue to undercut domestically produced alternatives. Northeast Asian polysilicon prices ticked up about 10.8% between September and December 2025, but from such a low baseline that the increase barely registers in final panel pricing.
New Panel Technology Delivers More for Less
The solar industry is in the middle of a technology transition that improves the value proposition even when sticker prices stay flat. The older standard, called PERC, maxes out around 24.5% efficiency. The newer design, called TOPCon, already exceeds 26% efficiency, meaning each panel produces more electricity from the same amount of sunlight.
TOPCon panels currently cost about $0.03 per watt more than PERC panels, which adds roughly $3,000 to a 100-kilowatt commercial installation. But that premium pays for itself through better long-term performance. TOPCon panels degrade more slowly: about 1% in the first year compared to 2% for PERC, and 0.4% annually after that versus 0.45%. After 25 years, TOPCon panels retain over 90% of their original output. This means the cost per kilowatt-hour of electricity produced over the panel’s lifetime is substantially lower with the newer technology, even if the upfront price is slightly higher.
As TOPCon manufacturing scales up further, the price premium over PERC will likely shrink or disappear entirely.
Battery Storage Is Getting Cheaper Too
If you’re considering solar with battery backup, the storage side of the equation is dropping even faster than panels. Battery pack prices for home and commercial storage fell to $70 per kilowatt-hour in 2025, a 45% drop from the previous year. BloombergNEF expects prices to decrease again in 2026 as lower-cost battery chemistry continues to gain market share.
This matters because batteries are often the most expensive part of a solar-plus-storage system. A typical home battery stores 10 to 15 kilowatt-hours, so at $70 per kWh, the battery cells alone cost $700 to $1,050 before installation and electronics are added. Two years ago, that same capacity would have cost nearly double. Falling battery prices make the full solar package, panels plus storage, significantly more attractive than panels alone were just a few years ago.
U.S. Tariffs Could Push Prices Up
One force working against lower prices in the United States is trade policy. In May 2024, the U.S. Department of Commerce launched antidumping and countervailing duty investigations into solar cells imported from Cambodia, Malaysia, Thailand, and Vietnam. These four countries are where most solar panels sold in the U.S. are actually assembled, largely by Chinese-affiliated companies that shifted production to avoid earlier tariffs on Chinese-made panels.
The alleged dumping margins are enormous: 271% for Vietnam, 125% for Cambodia, 81% for Malaysia, and 70% for Thailand. If duties at or near these levels are imposed, they would dramatically increase the cost of imported panels for U.S. buyers. Previous rounds of solar tariffs have typically added 15% to 25% to system costs, though the market has eventually adjusted through a mix of domestic manufacturing growth and supply chain reshuffling.
The tariff situation creates real uncertainty for U.S. solar pricing specifically. Global panel prices will almost certainly keep falling, but American consumers may not see the full benefit if trade barriers keep cheap imports out of the market.
The Federal Tax Credit Changes After 2033
The federal Residential Clean Energy Credit currently covers 30% of the cost of a home solar installation, including panels, batteries, wiring, and labor. This 30% credit applies to systems installed from 2022 through 2032. Starting in 2033, the credit begins to phase down.
This is worth weighing against future price drops. Even if panel hardware falls another 10% to 15% over the next few years, losing a 30% tax credit would more than wipe out those savings. For someone installing a $25,000 system today, the credit is worth $7,500. A 15% price drop on that same system would save $3,750, less than half the value of the full credit.
The math gets more nuanced depending on your electricity rates, how much sun your roof gets, and whether your state offers additional incentives. But in general, the combination of already-low hardware prices and a 30% federal credit means waiting for prices to fall further doesn’t necessarily save money. The panels you don’t install are panels that aren’t generating free electricity on your roof in the meantime.
What This Means for Timing
Solar hardware prices will continue declining globally, driven by massive Chinese overcapacity, improving cell technology, and cheap polysilicon. Battery storage costs are falling even faster. These are structural trends unlikely to reverse in the next five to ten years.
In the U.S., however, two countervailing forces complicate the picture. New tariffs on Southeast Asian imports could raise panel costs domestically, and the 30% federal tax credit holds steady only through 2032. If you’re in the U.S. and your roof is ready, the current combination of low prices and a full tax credit is already historically favorable. Waiting for cheaper panels while the credit phases down is, for most homeowners, a losing trade.