Historical Satellite Cost

Satellites demonstrate dis-economies of scale [1]. Smaller satellite are dramatically less expensive to develop and deploy. The smallest satellites can cost as little as $100/kg where the most expensive satellites can cost $1,000,000/kg.

The The Aerospace Corporation researched this relationship and reported in Crosslink magazine that..

"With miniaturization, every kilogram saved in the spacecraft bus or instruments represented a possible saving of up to five kilograms in launch, onboard propulsion, and attitude-control systems mass. Reduced power demands from microelectronics, instruments, and sensors could produce similar payoffs. For interplanetary missions, reduced mass had the capability to produce indirect cost savings through shorter transit times and mission duration. All this downsizing eliminated the need for large facilities and costly equipment such as high bays, clean-room areas, test facilities, and special handling equipment and containers. " [2]

Additionally, the development methods are radically different in small satellites versus large satellites. Often, these small satellites were developed using processes outside of the norms at NASA - National Aeronautics and Space Administration and the United States Department of Defense.

This has interesting implications for space based solar power (SBSP). At first glance, this might suggest that costs would explode with mass. However, looking closer, it implies that using a hyper-modular approach [3], based on a few distinct components can be orders of magnitude cheaper than a design with many unique components.

References

[1] https://en.wikipedia.org/wiki/Diseconomies_of_scale

[2] Bearden, David A. "Small-satellite costs." Crosslink 2.1 (2001): 32-44. - https://spacese.spacegrant.org/uploads/Costs/BeardenComplexityCrosslink.pdf

[3] https://www.nasa.gov/wp-content/uploads/2017/07/niac_2011_phasei_mankins_spsalpha_tagged.pdf