Solar Energy Prices Show Steady Downward Trend, Will Soon Reach on Par with Fossil-fuel-derived Energy

As solar energy claims a larger share in the energy industry, it continues to become cheaper and more affordable for consumers. If the current costs of solar energy continue to decline, it will only be a matter of years before consumers are able to seamlessly switch from conventionally generated energy to solar energy – an unconventional form of energy. Once this happens, renewable energy will be on an equal playing field with conventional energy sources.

According to the International Energy Agency, the prices of power generated from renewable sources – especially solar panels – will drop considerably by 2020. With this, renewable energy sources are on the brink of becoming highly competitive in the next few years. Interestingly, it is not just the International Energy Agency that is of this opinion. Several high-level studies conducted by European governments have reached the same conclusion.

The IEA study, which was published in late 2015, says that the costs of solar energy as well as wind energy have deflated considerably over the last five years. As compared to previous studies conducted by the IEA in 2010, a noticeable fall in solar energy prices was seen in 2015.

According to the study, the cost of producing energy via solar panels (inclusive of the costs of operating and building the required infrastructure) will likely fall to $100/MWh by 2025 from hovering at $500 per MWh in 2010.

The study also reveals that by 2030, the costs of rooftop systems could drop down to nearly $95/MWh. As and when the cost of running and operating solar power plants drops (along with capital costs being low), solar energy will be in a position to compete directly with combined cycle gas turbines. The study also found that nuclear could possibly emerge as the cheapest option for all countries that are invested in this form of energy, if the capital costs of nuclear energy slide downward. 

Browse Industry Research Report on Solar Energy:

However, if compared against 2010, it is the cost of solar energy that has fallen the most since 2010, the IEA says.


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