The solar panel itself and the solar farm have undergone massive transformation in the last decade which can be proven by the availability of single solar panel with higher rating and the solar farm with the scale of thousands of Megawatts. Similarly, the price of solar panel cost has decreased drastically excluding the Covid regime when the production was minimal.

Solar’s exceptional success can be attributed to various factors, but a key driver is its significant cost reduction over the past decade, propelling it to become the global leader in terms of cost competitiveness. However, the past two years (Year 2021 and 2022) have witnessed significant disruptions in global supply chains, causing significant price increases. Lingering effects from the COVID-19 pandemic and the last lockdown in Shanghai in 2022 have led to increased shipping costs, while the war in Ukraine has sparked inflationary pressure worldwide[1].

Despite temporary product price increases stemming from the supply chain issue during the Covid pandemic, solar still surpassed fossil fuels and nuclear energy in unsubsidized investment cases throughout 2022 and 2023. This cost advantage is expected to improve again now that issues in product supply and logistics have been largely overcome. The International Energy Agency expects about 380 billion USD will be invested into solar in 2023, leaving behind investment in oil for the first time.[2]

It is seen that the global weighted-average total installed cost of solar PV projects reduced by about 67% from 2652 USD/kW in 2014 to 876 USD/kW in 2022. The reduction in the 2022 weighted-average total installed cost compared to the 2021 value was about 4%. The results from IRENA’s REmap analysis also indicate that the global weighted-average total installed cost of solar PV projects would reduce from 876 USD/ kW in 2022 to an average within 340–834 USD/kW by 2030 and 165–481 USD/kW by 2050. Similarly in terms of Levelized cost of Electricity (LCOE), it is seen that the global weighted-average LCOE of solar PV technology reduced by about 89 % from 0.445 USD/ kWh in 2010 to 0.049 USD/kWh in 2022. The 2022 global weighted-average LCOE reduction compared to the 2021 value was about 3%. The results from IRENA’s REmap analysis also indicate that the LCOE for solar PV projects would reduce from 0.049 USD/kWh in 2022 to an average within 0.02–0.08 USD/kWh by 2030 and 0.014–0.05 USD/kWh by 2050. Hence, it has been estimated that, in the next three decades, the solar PV field can advance to become the second prominent generation source by constructing more solar farms, allowing countries to generate approximately 25% of the world’s total electricity needs by 2050.[3]

So, it can be concluded that there is a trend of cost reduction of solar farms. So, the same can be expected in Nepal. The major aspect of cost reduction is innovation in the solar panels. Investing in solar farms now can pave the way for a sustainable and brighter future.

[1] Global Market Outlook, For Solar Power 2023-2027; Focus on Southeast Asia

[2] IEA (2023), World Energy Investment 2023

[3] Solar energy status in the world: A comprehensive review, ScienceDirect, November 2023