Solar panels. (photo: AP)
It's
Official: Solar Energy Cheaper Than Fossil Fuels
By Lorraine Chow, EcoWatch
28 December 16
Renewable
energy has reached an important milestone. The World Economic Forum (WEF) has
determined that in many parts of the world, solar energy is now the same price
or even cheaper than fossil fuels for the first time.
In
a handbook released this
month, the WEF observed how the price of renewable technologies, particularly
solar, has declined to unprecedented lows.
This
brings US total installed solar capacity to 35.8 gigawatts, enough to power 6.5
million homes: http://on.nrdc.org/2i1vzrZ via @EcoWatch
While
the average global LCOE [levelized cost of electricity] for coal and natural
gas is around $100 per megawatt-hour, the price for solar has plummeted from
$600 a decade ago to $300 only five years later, and now close to or below $100
for utility-scale photovoltaic. For wind, the LCOE is around $50.
According
to the WEF, more than 30 countries have already reached grid parity—even
without subsidies. ("Grid parity" is the point when an alternative
energy source, say solar, can generate power at a LCOE that's equal or even
less than the price of traditional grid power.)
"It
is relevant to note that the mentioned evolution, market share gain and
continued potential for renewable energy do not hinge on a subsidy
advantage," the report added. "In fact, according to [International
Energy Agency], fossil-fuel consumption has received $493 billion in subsidies
in 2014, more than four times the value of subsidies to renewable energy."
The
WEF highlighted how the unsubsidized LCOE for utility-scale solar
photovoltaic—which was not competitive even five years ago—has declined at a 20
percent compounded annual rate, "making it not only viable but also more
attractive than coal in a wide range of countries."
Countries
that have already reached grid parity include Chile, Mexico, Brazil and
Australia with many more countries also on the same track. The WEF projects
that two thirds of the world will reach grid parity in the next couple of
years, and by 2020, solar photovoltaic energy is projected to have a lower LCOE
than coal or natural gas-fired generation throughout the world.
"Renewable
energy has reached a tipping point," Michael Drexler, who leads
infrastructure and development investing at the WEF, told Quartz. "It is not
only a commercially viable option, but an outright compelling investment
opportunity with long-term, stable, inflation-protected returns."
The
report follows a recent analysis from the IEA
which revealed that total clean power capacity increased by 153 gigawatts,
overtaking coal for the first time. To illustrate, about 500,000 solar panels
installed were installed around the world every day.
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