Solar PV will be the cheapest way to generate electricity by 2030
The way we get electricity is about to change dramatically, as we are less than a decade away from reaching the point in which the ever-expanding demand for fossil fuels comes to an end, the point of “peak fossil fuels”.
After this point, less of these dirty fuels will be burned to produce electricity year after year.
This shift is not happening because we’re running out of coal or gas, but because we’re finding cheaper alternatives.
What are these alternatives? Clean, renewable energy sources.
Historically, the cost of renewables has been cited as one of the main barriers to switching from a fossil-based energy system to a renewable energy powered planet, but this is now changing.
Since 2009, prices for solar photovoltaic (PV) have fallen by 80%, and wind turbine prices dropped by around 30-40%.
For every doubling of the world’s installed capacity, the costs for solar PV panels fall by 26% while the price for wind farms drops 19%, due to economies of scale and technology improvements, according to Bloomberg New Energy Finance.
Source: Bloomberg New Energy Finance
These dramatic cost reductions are expected to continue well into the future.
The average cost of electricity generated by solar PV could fall by up to 59% by 2025, 43% for concentrated solar power, 35% for offshore wind, and 26% for onshore wind compared to 2015, according to a new report by IRENA.
What does this mean?
Wind and solar are already the cheapest ways to generate electricity in many places around the world; these further cost reductions will only strengthen the business case to switching from a dirty fossil fuel powered planet, to a clean, renewable one.
This translates into more and more investments into the sector. Renewables are expected to absorb most of the financial investments into the power sector through 2040. More accurately, 68% of new electricity capacity is expected to be in renewable energy over the next 25 years.
The renewable energy revolution has already started; it’s up to us to make it move faster and shift towards a renewable powered planet as soon as possible to avoid burning dirty fossil fuels, which cause terrible social, environmental and financial damages.