Solar panel costs have collapsed from $5 to $6 per watt in the early 2000s to about 12 cents per watt today, according to Financial Times reporting on data from Ember and the Energy Institute. That decline is now reshaping how electricity gets bought, sold, and generated on nearly every continent — sometimes in ways utilities never planned for.
At a glance
- Price collapse: Solar panels that cost $5 to $6 per watt around 2000 now cost about 12 cents per watt, driven largely by Chinese manufacturing scale.
- Global scale: Installed small-scale solar capacity worldwide reached nearly 1.2 terawatts by the end of 2025 — about three times the size of the global nuclear fleet.
- Industrial adoption: Pakistan’s Bestway Cement now covers more than a quarter of one plant’s electricity with 26 megawatts of solar, cutting its power costs by up to 40%.
Cheaper than staying on the grid
In Chakwal, Pakistan, Bestway Cement’s plant manager Abdul Waheed told the Financial Times that going solar wasn’t about sustainability — it was survival. “It’s the only way we can compete,” he said. “Our rivals have already gone in this direction.” The plant produces more than 3 million tonnes of cement a year and plans to add another 6.34 megawatts of solar by year’s end. China’s manufacturing scale is the main driver behind the price collapse: Wood Mackenzie estimates the country’s solar manufacturing capacity at roughly 1.36 terawatts, part of a broader wave of clean energy milestones reshaping how the world generates power.
The pattern repeats far beyond heavy industry. In the Philippines, rooftop solar capacity nearly doubled in the 12 months through April, and residential systems can now pay for themselves in a little over three years, according to Ember. In India, a national subsidy program launched in 2024 has installed panels on more than five million homes, adding roughly 500,000 more each month. Tata Power CEO Praveer Sinha called it “a democratization of the use of electricity.”
A harder problem for utilities
Cheap solar is straining the finances of the utilities it bypasses. Customers who install their own panels and batteries buy less power from the grid, even though they still depend on it at night, during cloudy weather, and when batteries run low. That leaves utilities with less revenue to maintain the same infrastructure.
In Karachi, utility K-Electric says it loses money supplying electricity to the working-class Lyari district, even as it profits from the wealthier Defence Housing Authority neighborhood, where solar has spread fastest. K-Electric CEO Syed Muhammad Taha called rooftop solar a “curse and a blessing.” Azem Baloch, a mechanic renting a flat in Lyari, said he now spends more than half his income on power. South Africa’s Eskom reports that rooftop solar and batteries accounted for roughly 7% of an 11.7-terawatt-hour drop in its electricity sales over the past year.
Grids weren’t built for this
Solar’s unpredictability creates its own technical headaches. In Australia, midday solar output can push grid demand so low that conventional power plants become harder to keep running. “If you have a massive cloud formation, the rooftop PV production can drop by so much that it looks like you have lost basically almost a nuclear power station,” said Pierluigi Mancarella, chair professor of electrical power systems at the University of Melbourne.
Utilities are racing to adapt with batteries, new pricing models, and better forecasting. UK Power Networks recently completed a roughly $524,000 study using machine-learning models to estimate how much solar capacity is connected to its network at any given time.
Read more
For more on this story, see: Financial Times
For more from Good News for Humankind, see:
- Pakistan’s rooftop solar becomes its largest electricity source
- The green economy surpasses $10 trillion in market value
- The Good News for Humankind archive on clean & renewable energy
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