A 2017 paper by F. Lafond and colleagues, titled 'How well do experience curves predict technological progress? A method for making distributional forecasts', is one of the data sources for Figure 2.22.

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Figure 2.22 is a chart that visually demonstrates the dramatic decrease in the cost of photovoltaic cells, which are used for solar energy production, starting from 1976. The data presented on this chart, which uses a special ratio scale, forms a nearly straight line, illustrating a consistent trend in price reduction as production capacity has grown.

Figure 2.22: The Price of Photovoltaic Cells (1976–2019)

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

Figure 2.22 employs a ratio, or logarithmic, scale to display its data. On this type of scale, the axes are not linear. Instead, each incremental step up the vertical axis represents a doubling of the price, while each step along the horizontal axis signifies a tenfold increase in installed capacity.

Ratio Scale in Figure 2.22

The slope of the line in Figure 2.22 reveals a consistent correlation between the installed capacity of solar photovoltaic cells and their cost. Specifically, it shows that for every tenfold increase in installed capacity, the cost is approximately halved.

Relationship Between Capacity and Cost in Figure 2.22

Source for Figure 2.22: Lafond et al. (2017) on Experience Curves

A 2020 resource from the International Renewable Energy Agency (IRENA) provides data on global solar PV installed capacity and model prices, and is cited as a source for the information presented in Figure 2.22.

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