Cost Reduction Dynamics

How learning curves, economies of scale, and technological innovation drive down renewable energy costs

Your Progress

Section 2 of 5

Introduction

The Power of Learning Curves

Renewable energy costs have plummeted dramatically over the past decade, following predictable learning curves where costs decline by 15-25% each time cumulative production doubles. This "experience curve" effect is driven by multiple reinforcing factors.

Solar photovoltaic costs have fallen by over 90% since 2010, wind power by 70%, and battery storage costs have dropped 85% in just the last decade. These reductions aren't random - they're the result of systematic improvements across the entire value chain.

Key Cost Reduction Drivers

Manufacturing Scale: Mass production reduces per-unit costs through automation and specialization
Technology Innovation: Better materials, designs, and manufacturing processes improve efficiency
Supply Chain Optimization: Global sourcing and just-in-time manufacturing reduce overhead
Market Competition: More players drive innovation and efficiency improvements

Interactive Cost Reduction Timeline

Cost Reduction Timeline: Solar PV

1975

$76.67/unit

-0%

1987

$57.91/unit

-24%

1999

$39.14/unit

-49%

2011

$20.38/unit

-73%

2023

$1.61/unit

-98%

Learning Curve Effect

Each time cumulative production doubles, costs typically fall by 15-25% due to:

Manufacturing process improvements

Economies of scale in production

Supply chain optimization

Research and development investments

←

Introduction