In the previous article, we followed the long shift from coal to oil and then to electricity. This article looks at the second signal of the electric age: cost.
Three charts tell the story. The first shows how quickly different electricity sources grew after reaching the same starting point. The next two show the long fall in the price of solar panels and lithium-ion battery cells.
The big idea: A technology can spread much faster when it becomes modular, mass-produced, and cheaper as more of it is built.
1. Electricity Cost Is Not One Number
When people say that electricity is getting cheaper, they may be talking about very different things.
- The price of a solar panel
- The cost of building a complete solar power plant
- The price of a lithium-ion battery cell
- The cost of a complete battery storage project
- The cost of producing one unit of electricity
- The final bill paid by a home or business
These are connected, but they are not the same.
A cheaper solar module can reduce the cost of a power plant. A cheaper battery cell can reduce the cost of an electric vehicle or storage system. But the final price of electricity also depends on land, construction, financing, grids, taxes, maintenance, and local market rules.
We therefore need to read each chart carefully.
2. Chart 1: Solar and Wind Scaled Up Very Quickly
The first chart does not compare calendar years. It gives each electricity source a different starting date.
“Year 0” is the first year in which a source produced more than 100 terawatt-hours of electricity worldwide. Wind reached this point in 2005. Solar reached it in 2013. The chart then follows each source from its own year 0.
This creates a fairer question:
After an electricity source became large enough to matter, how quickly did it grow?
Figure 1. How Quickly Did Each Electricity Source Scale Up? Data: Ember (2026) and Pinto et al. (2023), with major processing by Our World in Data. Chart recreated by The Contexta from open data.
The result is striking. Solar rises the fastest in its early years. Wind also grows quickly. Nuclear power grew strongly after its first 100 TWh, but its curve is slower and longer. Gas, hydro, oil, and coal show more gradual paths in this aligned comparison.
This chart measures electricity generation, not installed capacity and not price. It does not prove why solar and wind grew so fast. But it shows that their expansion followed a different speed from many older power technologies.
One reason is their physical design. A large coal or nuclear plant is a major construction project. Solar panels are factory-made units. A project can begin with a small number and add more over time. Wind turbines are also produced in repeated units and installed across many separate projects.
Modular technologies are easier to copy, improve, finance in stages, and build in many places at once.
3. Chart 2: Solar Panels Became More Than 99% Cheaper
The second chart explains part of solar power’s fast growth.
In the 1970s, solar panels were extremely expensive. They were useful mainly in special applications, including satellites and remote systems. Over the following decades, their price fell by more than 99%.
Figure 2. Solar Photovoltaic Panel Prices Source: IRENA (2025), Nemet (2009), and Farmer and Lafond (2016), with major processing by Our World in Data. CC BY.
The vertical axis uses a logarithmic scale. This is important. Equal distances on the chart represent multiplication or division, not a simple difference of one dollar.
The chart also measures the price of the solar module itself. It does not include the full cost of land, mounting structures, cables, inverters, labor, finance, and grid connection.
Still, the module is the central part of the technology. Its price decline changed what was possible.
Solar has followed a learning curve. For more than four decades, the price of solar modules fell by about 20% each time total global capacity doubled.
More production created more experience.
More experience improved design and manufacturing.
Better manufacturing lowered the price.
A lower price created more demand.
This is another reinforcing cycle.
4. Why Did Solar Become So Cheap?
No single invention explains the fall.
Solar cells became more efficient. Manufacturers used less material. Factories became larger and more automated. Supply chains became more specialized. Companies learned how to reduce waste and improve quality. Competition also pushed prices down.
Most importantly, solar panels are manufactured products. They are made repeatedly in factories, much like chips, screens, and batteries.
A coal plant can improve, but it must still buy and burn fuel. A solar panel has no fuel cost after installation. Its economics depend mainly on the cost of equipment, construction, finance, maintenance, and the amount of sunlight it receives.
This does not mean solar electricity is equally cheap everywhere. A sunny region with low financing costs and a strong grid has an advantage. A region with expensive loans, weak transmission, or long approval times may pay much more for the same panel.
5. Chart 3: Lithium-Ion Battery Cell Prices Fell by More Than 99%
Cheap generation is only one part of the electric system.
Electricity must also reach the right place at the right time. Solar output falls after sunset. Wind output changes with the weather. Batteries can store electricity and release it later.
Lithium-ion batteries began as an expensive technology for small electronic devices. In 1991, battery cells cost about $9,200 per kilowatt-hour in inflation-adjusted terms. By 2024, the price had fallen to about $78 per kilowatt-hour.
Figure 3. Price of Lithium-Ion Battery Cells Source: Rupert Way, based on Ziegler and Trancik, BloombergNEF, and Avicenne Energy, with processing by Our World in Data. CC BY.
This chart also needs a careful reading. It shows the representative price of a battery cell, not a complete battery pack or a grid-scale storage plant.
A complete system also needs cooling, wiring, control software, fire protection, housing, installation, and power-conversion equipment.
Even so, lower cell prices have changed several industries at once. They helped make smartphones, laptops, electric cars, drones, robots, and energy-storage systems more practical.
Battery prices also followed a learning curve. From the late 1990s onward, prices fell by roughly 19% each time cumulative production doubled.
6. Solar and Batteries Make Each Other More Useful
Solar and batteries are not simply two separate technologies.
Cheap solar creates low-cost electricity during sunny hours. Cheap batteries can move part of that electricity to the evening. Better power electronics and software can decide when to charge, when to discharge, and how to protect the grid.
The system can be written like this:
Cheaper solar → more generation
Cheaper batteries → more storage
Better software → better control
Together → more useful electricity
This combination is one reason the electric age is accelerating.
7. Cheap Technology Does Not Always Mean a Cheap Electricity Bill
This is the point most people miss.
Solar panels and battery cells can become cheaper while household electricity bills stay high. The reason is that the final bill pays for an entire system.
- Power plants and storage
- Transmission and local distribution
- Transformers and substations
- Backup and balancing services
- Financing and insurance
- Maintenance, taxes, and market rules
The levelized cost of electricity, often called LCOE, estimates the average lifetime cost of producing electricity from a project. It is useful, but it is not the same as the retail price on a monthly bill.
According to IRENA, 91% of new utility-scale renewable projects commissioned in 2024 produced electricity at a lower cost than new fossil-fuel alternatives. Its latest 2025 cost report places the global average LCOE at about $44 per megawatt-hour for solar PV and $33 per megawatt-hour for onshore wind.
These figures show that new renewable generation can be very competitive. They do not remove the need for grids, storage, flexible demand, and reliable backup.
8. Why Falling Costs Matter for the Electric State
The first article argued that electricity is becoming the physical base for software and AI.
Lower costs make that connection stronger.
When electricity is cheaper, more vehicles, machines, buildings, and industrial processes can become electric. When batteries are cheaper, more of those systems can move or operate away from a fixed power line. When sensors and chips are added, their physical activity becomes data.
AI can then analyze that data and control the system.
Lower cost → more electrification → more connected machines → more data → more AI control
This is why electricity cost is not only an energy issue. It is also an industrial and digital issue.
9. What to Watch Next
The cost curves are powerful, but they do not guarantee a smooth transition.
The next signal is grid capacity.
Can countries build transmission lines, transformers, substations, storage, and control systems fast enough? Can the grid connect new solar farms, wind projects, data centers, factories, and electric vehicles without losing reliability?
The technologies that generate electricity may be scaling quickly. The networks that carry electricity often take much longer to plan and build.
That may become the main bottleneck of the electric age.
Conclusion: Cost Changes What Can Scale
The first chart shows speed. Solar and wind grew rapidly after reaching a meaningful global scale.
The second chart shows why solar could spread. The price of solar modules fell by more than 99%.
The third chart shows why electricity can become more flexible. Lithium-ion battery cell prices also fell by more than 99%.
The lesson is not that electricity will always be cheap. It is that the main technologies of the electric age can improve through mass production and learning.
Coal and oil must be extracted again and again.
Solar panels and batteries can be improved again and again.
That difference helps explain why the electric age is moving so quickly.
Key English Words and Expressions
- scale up: to grow from a small system into a much larger one
- starting point: the place or condition where a comparison begins
- learning curve: a pattern in which cost falls as experience and production increase
- modular: made from separate units that can be added or replaced
- reinforcing cycle: a process in which each step makes the next step stronger
- keep up with: to grow or move as fast as something else
- bottleneck: the part of a system that limits the speed of the whole system
References and Data Sources
- How Quickly Did Each Electricity Source Scale Up? — Our World in Data; based on Ember (2026) and Pinto et al. (2023).
- Solar Photovoltaic Panel Prices — Our World in Data; data from IRENA (2025), Nemet (2009), and Farmer and Lafond (2016).
- Solar Panel Prices Have Fallen by Around 20% Every Time Global Capacity Doubled — Our World in Data.
- Price of Lithium-Ion Battery Cells — Our World in Data; data adapted from Rupert Way, based on Ziegler and Trancik, BloombergNEF, and Avicenne Energy.
- Battery Costs Have Declined by 99% in the Last Three Decades — Our World in Data.
- Renewable Power Generation Costs in 2024 — International Renewable Energy Agency.
- Renewable Power Generation Costs in 2025: Executive Summary — International Renewable Energy Agency.
- Re-examining Rates of Lithium-Ion Battery Technology Improvement and Cost Decline — Micah S. Ziegler and Jessika E. Trancik.
- Our World in Data: Reuse and Citation Guidelines — licensing and attribution guidance.
Image reuse note: Figures 2 and 3 are Our World in Data visualizations used with attribution under CC BY. The underlying data providers are also credited in the captions and references. Figure 1 is recreated from the open OWID dataset using Python.
