In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate power from solar for less than a mere 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are developing plans to hold auctions and tenders for this year, looking to drop prices even further.

In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate power from solar for less than a mere 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are developing plans to hold auctions and tenders for this year, looking to drop prices even further.

Solar Power Set to Become Cheapest Power On Earth

Solar power has become cheaper than coal in some parts of the world. Over the next couple years, it’s likely to be the lowest-cost option almost everywhere.

In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate power from solar for less than a mere 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are developing plans to hold auctions and tenders for this year, looking to drop prices even further. Taking advantage: Companies such as Italy’s Enel SpA and Dublin’s Mainstream Renewable Power, who have become popular in Europe are now seeking new markets abroad as subsidies deminish.

Since 2009, solar prices have dropped 62 percent, by trimming costs on every part of the supply chain. That has helped cut the risk premiums on bank loans, and pushed manufacturing capacity to record levels. By 2025, it is likely that solar will become cheaper than coal's average global cost, according to Bloomberg New Energy Finance.

“These are game-changing numbers, and it’s becoming normal in more and more markets," said Adnan Amin, International Renewable Energy Agency ’s director general, an Abu Dhabi-based intergovernmental group. "Every time you double capacity, you reduce the price by 20 percent.”

Graph of solar and coal prices over the past decade

Better technology is key to boosting the industry, from the use of diamond-wire saws that more efficiently cut wafers to better cells that provide more spark from the same amount of sun. The boost in energy has also driven by economies of scale and manufacturing experience since the solar boom, which only started a little more than a decade ago. This is ultimately giving the solar industry an increasing edge in the competition with fossil fuels.

The average 1 megawatt-plus ground mounted solar system will only cost 73 cents a watt by 2025 compared with $1.14 cost now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance.

That’s in step with other forecasts.

  • GTM Research expects some parts of the U.S. Southwest approaching $1 a watt today, and may drop as low as 75 cents in 2021, according to its analyst MJ Shiao.
  • The U.S. Energy Department’s National Renewable Energy Lab expects costs of about $1.20 a watt now declining to $1 by 2020. By 2030, current technology will squeeze out most potential savings, said Donald Chung, a senior project leader.
  • The International Energy Agency expects utility-scale generation costs to fall by another 25 percent on average in the next five years.
  • The International Renewable Energy Agency anticipates a further drop of 43 percent to 65 percent for solar costs by 2025. That would bring to 84 percent the cumulative decline since 2009.

The solar industries supply chain is experiencing the “Wal-Mart effect” from higher volumes and lower margins, according to Sami Khoreibi, founder and chief executive officer of Enviromena Power Systems, an Abu Dhabi-based developer.

The speed at which the price of solar will drop below coal varies in each country. Countries with large domestic coal reserves such as India and China will probably take longer than average. While places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before.

Coal’s Rebuttal

Some coal industry officials try to point out that cost comparisons involving renewables do not take into account the need to maintain backup supplies, which will be needed when the sun doesn’t shine or wind doesn’t blow. When these expenses are included, coal looks can look like the more economical choice, even around 2035, said Benjamin Sporton, chief executive officer of the World Coal Association.

“All advanced economies demand full-time electricity,” Sporton said. “Wind and solar can only generate part-time, intermittent electricity. While some renewable technologies have achieved significant cost reductions in recent years, it’s important to look at total system costs.”

Even so, solar’s plunge in price is starting to make the technology a plausible competitor.

 

New Energy Finance predicts that China, the biggest solar market will see the solar of solar dipping below the cost of coal by 2030. Recently, China has surpassed Germany as the nation with the most installed solar capacity as the government seeks to increase use to cut carbon emissions and boost residential consumption of clean energy. Yet curtailment remains a problem, particularly in sunnier parts of the country as congestion on the grid forces some solar plants to switch off.

Image of the shrinking costs of solar farms

Sunbelt countries are leading the way in cutting costs, though there’s more to it than just the weather. The use of auctions to award power-purchase contracts is forcing energy companies to compete with each other to lower costs.

An August auction in Chile yielded a contract for 2.91 cents a kilowatt-hour. In September, a United Arab Emirates auction grabbed headlines with a bid of 2.42 cents a kilowatt-hour. Developers have been emboldened to submit lower bids by expectations that the cost of the technology will continue to fall.

“We’re seeing a new reality where solar is the lowest-cost source of energy, and I don’t see an end in sight in terms of the decline in costs,” said Enviromena’s Khoreibi.

Original Article Written By Jess Shankleman & Chris Martin
Sourced from Bloomberg

  Interested in a Free Sun Analysis?
    Request a sun analysis to get a true cost quote for your home.

Is Solar Beating Coal to Become the Cheapest Power on Earth?

Solar power have become cheaper than coal in some parts of the world. Over the next couple years, it’s likely to be the lowest-cost option almost everywhere.

In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate power from solar for less than a mere 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are developing plans to hold auctions and tenders for this year, looking to drop prices even further. Taking advantage: Companies such as Italy’s Enel SpA and Dublin’s Mainstream Renewable Power, who have become popular in Europe are now seeking new markets abroad as subsidies deminish.

Since 2009, solar prices have dropped 62 percent, by trimming costs on every part of the supply chain. That has helped cut the risk premiums on bank loans, and pushed manufacturing capacity to record levels. By 2025, it is likely that solar will become cheaper than coal's average global cost, according to Bloomberg New Energy Finance.

“These are game-changing numbers, and it’s becoming normal in more and more markets," said Adnan Amin, International Renewable Energy Agency ’s director general, an Abu Dhabi-based intergovernmental group. "Every time you double capacity, you reduce the price by 20 percent.”

Image of Solar and Coals Price Over the past decade

Better technology is key to boosting the industry, from the use of diamond-wire saws that more efficiently cut wafers to better cells that provide more spark from the same amount of sun. The boost in energy has also driven by economies of scale and manufacturing experience since the solar boom, which only started a little more than a decade ago. This is ultimately giving the solar industry an increasing edge in the competition with fossil fuels.

The average 1 megawatt-plus ground mounted solar system will only cost 73 cents a watt by 2025 compared with $1.14 cost now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance.

That’s in step with other forecasts.

  • GTM Research expects some parts of the U.S. Southwest approaching $1 a watt today, and may drop as low as 75 cents in 2021, according to its analyst MJ Shiao.
  • The U.S. Energy Department’s National Renewable Energy Lab expects costs of about $1.20 a watt now declining to $1 by 2020. By 2030, current technology will squeeze out most potential savings, said Donald Chung, a senior project leader.
  • The International Energy Agency expects utility-scale generation costs to fall by another 25 percent on average in the next five years.
  • The International Renewable Energy Agency anticipates a further drop of 43 percent to 65 percent for solar costs by 2025. That would bring to 84 percent the cumulative decline since 2009.

The solar industries supply chain is experiencing the “Wal-Mart effect” from higher volumes and lower margins, according to Sami Khoreibi, founder and chief executive officer of Enviromena Power Systems, an Abu Dhabi-based developer.

The speed at which the price of solar will drop below coal varies in each country. Countries with large domestic coal reserves such as India and China will probably take longer than average. While places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before.

Coal’s Rebuttal

Some coal industry officials try to point out that cost comparisons involving renewables do not take into account the need to maintain backup supplies, which will be needed when the sun doesn’t shine or wind doesn’t blow. When these expenses are included, coal looks can look like the more economical choice, even around 2035, said Benjamin Sporton, chief executive officer of the World Coal Association.

“All advanced economies demand full-time electricity,” Sporton said. “Wind and solar can only generate part-time, intermittent electricity. While some renewable technologies have achieved significant cost reductions in recent years, it’s important to look at total system costs.”

Even so, solar’s plunge in price is starting to make the technology a plausible competitor.

 

New Energy Finance predicts that China, the biggest solar market will see the solar of solar dipping below the cost of coal by 2030. Recently, China has surpassed Germany as the nation with the most installed solar capacity as the government seeks to increase use to cut carbon emissions and boost residential consumption of clean energy. Yet curtailment remains a problem, particularly in sunnier parts of the country as congestion on the grid forces some solar plants to switch off.

shrinking solar farm costs

Sunbelt countries are leading the way in cutting costs, though there’s more to it than just the weather. The use of auctions to award power-purchase contracts is forcing energy companies to compete with each other to lower costs.

An August auction in Chile yielded a contract for 2.91 cents a kilowatt-hour. In September, a United Arab Emirates auction grabbed headlines with a bid of 2.42 cents a kilowatt-hour. Developers have been emboldened to submit lower bids by expectations that the cost of the technology will continue to fall.

“We’re seeing a new reality where solar is the lowest-cost source of energy, and I don’t see an end in sight in terms of the decline in costs,” said Enviromena’s Khoreibi.

Original Article Written By Jess Shankleman & Chris Martin
Sourced from Bloomberg 

  Interested in a Free Sun Analysis?
    Request a sun analysis to get a true cost quote for your home.

Is Solar Beating Coal to Become the Cheapest Power on Earth?

Solar power has become cheaper than coal in some parts of the world. Over the next couple years, it’s likely to be the lowest-cost option almost everywhere.

In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate power from solar for less than a mere 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are developing plans to hold auctions and tenders for this year, looking to drop prices even further. Taking advantage: Companies such as Italy’s Enel SpA and Dublin’s Mainstream Renewable Power, who have become popular in Europe are now seeking new markets abroad as subsidies deminish.

Since 2009, solar prices have dropped 62 percent, by trimming costs on every part of the supply chain. That has helped cut the risk premiums on bank loans, and pushed manufacturing capacity to record levels. By 2025, it is likely that solar will become cheaper than coal's average global cost, according to Bloomberg New Energy Finance.

“These are game-changing numbers, and it’s becoming normal in more and more markets," said Adnan Amin, International Renewable Energy Agency ’s director general, an Abu Dhabi-based intergovernmental group. "Every time you double capacity, you reduce the price by 20 percent.”

Solar and Coal Price Graph

Better technology is key to boosting the industry, from the use of diamond-wire saws that more efficiently cut wafers to better cells that provide more spark from the same amount of sun. The boost in energy has also driven by economies of scale and manufacturing experience since the solar boom, which only started a little more than a decade ago. This is ultimately giving the solar industry an increasing edge in the competition with fossil fuels.

The average 1 megawatt-plus ground mounted solar system will only cost 73 cents a watt by 2025 compared with $1.14 cost now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance.

That’s in step with other forecasts.

  • GTM Research expects some parts of the U.S. Southwest approaching $1 a watt today, and may drop as low as 75 cents in 2021, according to its analyst MJ Shiao.
  • The U.S. Energy Department’s National Renewable Energy Lab expects costs of about $1.20 a watt now declining to $1 by 2020. By 2030, current technology will squeeze out most potential savings, said Donald Chung, a senior project leader.
  • The International Energy Agency expects utility-scale generation costs to fall by another 25 percent on average in the next five years.
  • The International Renewable Energy Agency anticipates a further drop of 43 percent to 65 percent for solar costs by 2025. That would bring to 84 percent the cumulative decline since 2009.

The solar industries supply chain is experiencing the “Wal-Mart effect” from higher volumes and lower margins, according to Sami Khoreibi, founder and chief executive officer of Enviromena Power Systems, an Abu Dhabi-based developer.

The speed at which the price of solar will drop below coal varies in each country. Countries with large domestic coal reserves such as India and China will probably take longer than average. While places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before.

Coal’s Rebuttal

Some coal industry officials try to point out that cost comparisons involving renewables do not take into account the need to maintain backup supplies, which will be needed when the sun doesn’t shine or wind doesn’t blow. When these expenses are included, coal looks can look like the more economical choice, even around 2035, said Benjamin Sporton, chief executive officer of the World Coal Association.

“All advanced economies demand full-time electricity,” Sporton said. “Wind and solar can only generate part-time, intermittent electricity. While some renewable technologies have achieved significant cost reductions in recent years, it’s important to look at total system costs.”

Even so, solar’s plunge in price is starting to make the technology a plausible competitor.

 

New Energy Finance predicts that China, the biggest solar market will see the solar of solar dipping below the cost of coal by 2030. Recently, China has surpassed Germany as the nation with the most installed solar capacity as the government seeks to increase use to cut carbon emissions and boost residential consumption of clean energy. Yet curtailment remains a problem, particularly in sunnier parts of the country as congestion on the grid forces some solar plants to switch off.

Solar farm costs are shrinking

Sunbelt countries are leading the way in cutting costs, though there’s more to it than just the weather. The use of auctions to award power-purchase contracts is forcing energy companies to compete with each other to lower costs.

An August auction in Chile yielded a contract for 2.91 cents a kilowatt-hour. In September, a United Arab Emirates auction grabbed headlines with a bid of 2.42 cents a kilowatt-hour. Developers have been emboldened to submit lower bids by expectations that the cost of the technology will continue to fall.

“We’re seeing a new reality where solar is the lowest-cost source of energy, and I don’t see an end in sight in terms of the decline in costs,” said Enviromena’s Khoreibi.

Original Article Written By Jess Shankleman & Chris Martin
Sourced from Bloomberg

  Interested in a Free Sun Analysis?
    Request a sun analysis to get a true cost quote.


Interested in a Free Sun Analysis?  
Request a sun analysis to get a true cost quote for your home.      


You May Also Be Interested In



Previous Post Next Post

  • Offset Solar