Second, solar energy’s marginal fuel costs are zero, meaning that it costs nothing to produce every additional unit of electricity beyond the original cost of installing the panels and the ongoing cost of maintaining them.
Third, solar panels are modular: They come in small sizes available at constant fixed prices, making it easier to create a decentralized grid. In contrast, thermal or nuclear power stations are usually large with high fixed costs.
Bottlenecks in solar panel supply are unlikely, in part because there is plenty of excess capacity in the sector, with China’s production potential alone covering 200% of global demand in 2024. “Any slowing in solar growth is likely to come from reduced policy support and from power supply volatility rather than from solar panel supply bottlenecks,” says Struyven.
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