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In 1954, scientists at Bell Labs in the U.S. came up with the silicon solar cell, the first device that could efficiently convert sunlight into electricity. It didn’t take long before it was applied in space missions, powering satellites and space stations. That’s when solar power really started catching people’s attention to solve our energy needs.
So, why is solar power the future of energy? In this article, Sevendan Energy will discuss the following aspects: Solar is the cheapest energy resource; the marginal cost of solar electricity almost approach zero; High reliability of solar power, and the cost of solar power keeps dropping; compare nuclear and solar energy, the unique characteristics of solar is distributed. All these prove that photovoltaic is the ultimate mainstream energy solutions for mankind.
Solar Power is The Cheapest Energy Resource
Costs of Solar Power Systems
Components of a Solar power System
A solar power system mainly consists of solar panels, mounting brackets, DC cables, controllers, batteries, and inverters.
The solar panels convert sunlight into electricity, while the brackets hold the panels in place.
DC cables connect the panels to the controllers, which manage and protect the system.
The batteries store the electricity, and the inverters change the DC power into AC power for use in homes or businesses.
Solar Cost per kWh 2025
Right now, the cost of solar power systems is under $0.30/W, and the most affordable systems even decreases to $0.25/W (especially in Asia, where materials are sourced more cheaply). This price covers everything: the solar panels, cables, brackets, installation, and even the grid connection process.
Let’s break down the cost of 1 kWh of solar electricity based on an average of 1,500 hours sunlight per year and a 25-year lifespan for solar panels.
The amount of electricity produced by 1 watt in a year: 1W * 1,500 hours = 1.5 kWh.
Over 25 years, 1 watt would produce: 1.5 kWh * 25 = 37.5 kWh.
As a result, the cost of 1 kWh of solar electricity is: $0.30 ÷ 37.5 kWh = $0.008 /kWh.
Now, accounting for about 50% in maintenance and operational costs, the final cost comes to: $0.008 * 150% = $0.012/kWh, or 1.2 cents/kWh.
Data from utilities and energy providers show that the average electricity rate in the U.S. is 13.17 cents per kWh. Obviously, solar power is far cheaper than any other energy resource.
Development Status of Global Solar Power
Continuing the trend reported in recent years, 2024 saw the largest increase in renewable energy capacity to date – with the addition of 585 gigawatts (GW) of renewables. Solar power alone accounted for over three-quarters of renewable additions, with a record 452 GW added during the year. Based on the above amounts, there is no other energy resource that can compete with photovoltaic in terms of the cost, which has already become the cheapest energy globally. However, why hasn’t it been installed more quickly and universally all over the world ? What is it that hold the process up?
the Limitations of Solar Power
Unlike hydroelectric, thermal, or nuclear power station, solar power station cannot generates electricity according to the demand of the grid (customers), but depends on how much sunlight there is.
The sun will produce power as much as possible at noon since there is the strongest sunshine. But at night, they don’t generate any electricity at all as there is no sunlight during this time.
In consequence, that process has exactly caused the mismatch and conflict between of output of solar power and the power demand of the grid. If solar plants generates more electricity than the grid can handle and sustain during the day, which will bring about more pressure to the grid.
Can We Solve This Problem
The answer is absolutely yes, of course we can solve this problem. The solution is to establish the energy storage system with solar power station. The extra energy from the solar panels can be stored in batteries when the grid doesn’t need much power.
Correspondingly, the stored energy can be released to the grid as there is high demand for the electricity. In this way, the timing mismatch between solar power generation and grid demand would be properly solved.
Therefore, solar-storage power plants can operate as well as coal, hydro, or nuclear plants. Fortunately, thanks to advances in technology, the cost of energy storage has dropped enough to make the system available and feasible today.
How Much Does Solar Power Cost with Storage
Application of Energy Storage Systems
In order to tackle the issue of solar power being uncontrollable by the grid, energy storage systems are now put wide and large scale into use. The solar plant will produce continuous power as long as there’s plenty of sunlight, thus the storage system captures and stores the excess energy to prevent the grid from overloading by the high-power electricity.
On the other hand, the stored energy would be used to keep the power supply when there’s less or no sunlight. By this means, the problem of solar power’s instability would be appropriately solved so the grid would maintain a steady, reliable power supply.
How Much Does Solar Power Cost with Storage
According to the bidding data from China in October 2024:
In October 2024, a total of 104 energy storage projects were opened in 25 provinces of China, with a total scale of about 5.98GW/17.1GWh.
Lithium energy storage EPC focused on 2h and 4h energy storage projects, with bid prices ranging from 0.642-1.5 yuan/Wh and an average bid price of 1.06 yuan/Wh, a decrease of 3.6% month-on-month.
The winning bid price was between 0.695-1.288 yuan/Wh, with an average winning bid price of 1 yuan/Wh, a decrease of 10.7% month-on-month.
There have been 26 large storage EPCs, with bid price ranges of 0.642-1.35 yuan/Wh, an average bid price of 0.97 yuan/Wh, a winning bid range of 0.695-1.25 yuan/Wh, and an average winning bid price of 0.94 yuan/Wh.
There have been 16 industrial and commercial energy storage EPCs, with bid prices ranging from 0.838-1.5 yuan/Wh, an average bid of 1.22 yuan/Wh, a winning bid range of 0.838-1.288 yuan/Wh, and an average winning bid price of 1.16 yuan/Wh.
According to the above information, it can be obtained that energy storage system cost is $0.15/WH.
To make it easier for readers to understand, we assume that half of the energy from the solar plant generated would be sent directly to the grid, while the other half would be stored in an energy storage system for later use if necessary.
Now, if we take one watt of solar power, over the course of a day (1,500 hours a year), the amount of electricity it will generate is 1W * 1,500h ÷ 365=4.1 Wh.
To store that, what we need is a 2.05 Wh energy storage system.
The cost for that 2.05 Wh storage system comes out to 2.05Wh * $0.15/Wh = $0.3075.
Lithium batteries for storage can be cycled for about 6,000 times’ utilization, so over the whole life of the battery, we get 2.05 Wh * 6,000 = 12,300 Wh, or 12.3 kWh.
Therefore, the cost of storing 1 kWh of energy in this system is $0.3075 ÷ 12.3kWh = $0.025 /kWh, or 2.5 cents /kWh.
When we get everything summed up, the solar power cost with storage comes out to 1.2 cents/kWh+ 2.5 cents/kWh = 3.7 cents/kWh.
Even with storage costs included, PV storage systems still offer the lowest cost during the process of generating electricity.
Solar Power is Cheapest Renewable Energy
Today, thermal power costs roughly 10.8 cents/kWh; hydroelectric is less expensive, ranging from about 5 to 7 cents/kWh; wind power costs about 7.1 cents/kWh; nuclear is relatively costly, at about 14.2 cents/kWh. Among them, PV storage generation just costs 3.7 cents/kWh. As technology advances with every passing day, the price of PV systems and storage systems will become cheaper and cheaper, and PV storage generation must take up the place of the cheapest energy.
The Marginal Cost of Solar Power is Almost 0
Definition of Marginal Costs
Marginal cost refers to the additional cost of producing one additional unit of a product. In photovoltaic power, marginal cost refers to the additional cost that required to produce one more kilowatt-hour of electricity.
Characteristics of Solar Power
No Fuel Needed
Solar power relies on on sunlight as an energy resource. It ‘s known to us all that the sunlight is completely free. On the contrary, the traditional resource like coal or natural gas plants, which have to run based on the fuel that is high-cost, While there is no extra fuel costs of the PV systems. In other words, even if the solar plants produce more power, the total costs won’t go up though the system is running.
Runs Automatically
There is no more demand of manual labor or complicated maintenance for the photovoltaic system, which is in distinct contrast with traditional power resources like coal or nuclear requiring more staff and higher maintenance expenses.
No Mechanical Parts to Wear Out
There is no complex mechanical moving parts of the solar power systems. Simultaneously, And there is also hardly any dynamic wear of the core component during normal operation. It is unnecessary to increase maintenance costs significantly as much as continuous running wind turbines.
The Marginal Cost of Solar Power is Almost 0
The cost of photovoltaic power generation is mainly concentrated on the initial phase of capital expenditure, including equipment procurement, leasing land, then construction and installation.
The expense of operation and maintenance occupies extremely little proportion during the power generation, which won’t change significantly with the increase in power generation.
In addition, The extra generated energy has little impact on the costs, as well. What’s more, while the PV asset has passed the depreciation period, the marginal cost tends to be even lower so that this marginal cost can be regarded as approaching 0.
High Reliability of Solar Power
Advanced Solar Technology
Having experienced years of development and innovation, PV technique nowadays has hit impressive levels. Although most solar panels come with a 25-year warranty as promised, Most PV systems, in fact, can support 40–50 years or more if avoids suffering from severe natural disasters.
Furthermore, the industry’s high standardization ensures the consistency and durability. The graphic below indicates leading PV module aging and failure mechanisms occurring as infant, midlife and wear-out failures.
Since its construction in 1994, the UK’s first photovoltaic system has operated reliably for over 20 years with a degradation rate of just 5%. Moreover, experts indicate that this system is expected to continue providing service for at least another 20 years!
Minimal Maintenance Needs
Once running, the whole solar power system is mainly automated , making upkeep quite simple. The Maintenance measure mainly involves cleaning the panels’ surfaces, monitoring the system performance so there is scarcely complex operational requirements, reducing the trouble rate accordingly.
Compare with coal or nuclear plants, which need regular replacements fuel or component, and you’ll see why solar system wins in reliability than the others.
The Cost of Solar Power Keeps Dropping
PV Power is Getting Cheaper
The International Renewable Energy Agency (IRENA) published the report Renewable power generation costs in 2024, stating that in 2024, 91% of all newly commissioned utility-scale renewable projects delivered electricity at a lower cost than the cheapest new fossil fuel-fired alternative. Onshore wind retained its position as the most affordable source of new power generation globally, with a global weighted average levelised cost of electricity (LCOE) of USD 0.034/kWh, closely followed by solar PV at USD 0.043/kWh and hydropower at USD 0.057/kWh.
Meanwhile, emerging enabling technologies, such as battery energy storage systems, continue to see rapid cost reductions. In 2024, the cost of utility-scale battery storage fell to USD 192/kWh – a 93% decline since 2010 – driven by manufacturing scale-up, improved materials and production efficiencies.
Tech is Driving the Next Wave of efficiency
These days, cutting the cost of solar modules alone doesn’t make a big impact anymore. Costs for cables, racking, and installation, to a certain extent, occupy a higher proportion than the solar modules in the total solar system cost.
Only by improving efficiency can we systematically reduce the substantial costs. With new breakthroughs like BC and laminated perovskite technology implies the huge potential for improvement efficiency, which means that there will be lower packaging (BOM) costs for solar panels as well as reduced construction (BOS) costs for power stations.
Even as prices for PV systems have plummeted—by 70% in just one year. Although we are amazed by the extremely low prices of photovoltaic (PV) products today, which have fallen by 70% in just one year. Here we still have an invincible faith that there’s considerable potential for further cost reduction of photovoltaic, especially when viewed over the next five-ten years.
From what has been discussed above, we may reasonably draw the conclusion that solar will eventually become the dominant energy resource for humanity.
Solar Power Cost vs. nuclear
Status of Nuclear Energy
The United States built the world’s first nuclear power plant in 1951, since then, nuclear power has become an integral part of the U.S. energy mix. Especially after the oil crisis in the 1970s, the government heavily backed nuclear energy, leading to a rapid increase in nuclear power plants, which has solidified the U.S.’s position as a global nuclear power leader.
Solar Power vs. Nuclear
To build a nuclear power plant is incredibly expensive and time-consuming—it takes over 10 years to recoup the investment. The levelized cost of electricity (LCOE) for nuclear energy ranges from 9 to 14 cents per kilowatt-hour, mainly due to high initial investment, fuel costs and security maintenance costs. Low cost as the fuel is , the overall performance still is not as good as photovoltaic.
In contrast, PV outshine nuclear power in economic terms. Based on my in-depth research on the PV industry, even if controlled nuclear fusion becomes a reality, solar will remain the dominant energy resource. Need to clarify that here I mention the dominant energy resource does not refer to one of mainstreams, nor do I mean that solar power is one of an important energy source, but is indeed the mainstream.
Solar energy is set to account for more than 50% of global energy consumption in the future. Even if controlled nuclear fusion comes out in the future, it won’t change this trajectory. Why so convinced?
Unique Characteristics of Solar Power: Distributed
Solar Panel Can be Installed Anywhere
Unlike nuclear, thermal, or hydropower plants, which depend on specific geographic conditions, PV systems can run almost anywhere the sun shines.
Solar panels can be installed on residential rooftops, commercial buildings, or industrial facilities, bringing power generation right to the user.
This reduces reliance on the grid and avoids energy loss from long-distance transmission.
Solar + Storage = Grid Savings
Combining photovoltaics with energy storage allows users to generate and store their own electricity, sometimes eliminating the need for grid connections entirely, which reduces the cost of building and maintaining power grids in some ways, meanwhile also improving energy independence and stability.
Moreover, this will also reduce the risks caused by electricity use errors. With storage systems, consumers can save excess energy for later, like during peak demand times, cutting down on electricity bills.
Conclusion
Solar power is no longer just an alternative — it is rapidly becoming the foundation of the world’s clean energy future.
With costs continuing to fall, near-zero marginal expenses, improved reliability through advanced technology and storage, and unmatched scalability, solar has proven itself as the most practical and sustainable energy source for households, businesses, and entire nations.
Unlike fossil fuels or nuclear energy, solar is abundant, widely accessible, and environmentally friendly. The evidence is clear: investing in solar today means investing in a cleaner, cheaper, and more secure energy future for generations to come.
