Solar costs have fallen 82% since 2010

The levelized cost of energy generated by large scale solar plants is around $0.068/kWh, compared to $0.378 ten years ago and the price fell 13.1% between 2018 and last year alone, according to figures released by the International Renewable Energy Agency.
The costs of solar are set to keep on falling despite the fallout of Covid-19 this year. | Image: Rabenspiegel/Pixabay

“Since 2010, the cost of energy has dropped by 82% for photovoltaic solar, by 47% for concentrated solar energy (CSP), by 39% for onshore wind and by 29% for wind offshore.”

Those remarkable price falls are quoted by the International Renewable Energy Agency (Irena) in its Renewable Power Generation Costs in 2019 report.

The figures were compiled from the costs and tariffs reported for 17,000 renewable energy project tenders last year which should eventually add up to 1.7 GW of clean power generation capacity.

The cost reductions witnessed in the last decade were due to improved technology, economies of scale, supply chain competitiveness and the growing experience of developers, said Irena.

“The same amount of money invested in renewable energy is producing far more new capacity today than it was ten years ago,” stated the multilateral organization. In 2010, the 88 GW of renewables capacity installed worldwide required the equivalent of $210 billion. Last year, twice that capacity volume was put into service for $253 billion – around 20% more investment.

Solar

Between 2010 and 2019, the amount of global solar capacity rose from 40 GW to 580 GW, according to Irena – a growth factor of 14. During the same period, module prices fell 90% and balance of system (BoS) costs also decreased, if less steeply.

The current levelized cost of energy (LCOE) for large scale solar is $0.068/kWh, compared to $0.378 in 2010 and the cost fell 13.1% between 2018 and last year alone, according to the Irena report.

The nationally-weighted average cost of electricity from large scale solar fell 85% in India during that period, according to Irena. Other notable falls included China, Italy and South Korea, where the solar electricity price retreated 82%, as well as Spain (81%), Australia (78%), France (77%), Germany (73%) and the U.S. (66%). Emerging markets, too, have benefited from price falls. Vietnam, for instance has seen the solar energy cost fall 55% since 2016.

The Irena report also points out the cost – per kilowatt installed – of large scale solar projects dipped below $1,000 for the first time last year, to $995, a figure 18% smaller than that of 2018 and 79% cheaper than project costs a decade ago.

Rooftop PV

Residential solar costs, states the report, fell 47-80% between 2010 and last year, depending on the region.

“New projects to produce energy from renewable sources are less and less expensive today compared to existing coal-fired power plants,” stated the Irena study. “On average, it’s cheaper to commission new PV and wind power facilities than to keep many coal-fired plants in operation.”

Almost 56% of the large scale renewable energy plants commissioned last year produce electricity cheaper than the lowest-cost fossil fuel alternatives.

The picture was radically different in 2010, according to Irena, which said solar electricity from large scale projects at that point was 7.6 times more costly than from fossil fuel facilities.

“Next year, it could be more expensive to operate 1,200 GW of existing capacity in coal-fired power plants than putting new solar photovoltaic installations into service on an industrial scale,” said the renewables body, adding the maintenance or installation of new coal-fired power plants is not economically viable.

Procurement

Although the Covid-19 pandemic is expected to slow the rate of solar and wind deployment this year, the public health crisis shows no sign of being able to slow the cost reduction trajectory of renewables, according to Irena.

The most recent tenders and power purchase agreements (PPAs) indicate the price of solar electricity could average $0.039/kWh for projects commissioned next year. That would represent a fall of 42% from last year and would correspond to a fifth of the cost of the cheapest fossil fuel electricity – which is still that generated by coal-fired power plants.

“The record figures reached by the auction of solar photovoltaic electricity in Abu Dhabi and Dubai (UAE), Chile, Ethiopia, Mexico, Peru and Saudi Arabia confirm that values ​​of only $0.03/kWh are already possible,” added Irena.

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Ronnie Naidoo
Jun 05, 2020

This is great news for the homeowner who wants to use solar power. Please can you give me an estimate for a system that can generate approximately 18kwh per day.

Show replies
Hide replies
Modestus
Jun 10, 2020

Depending on your location.
If you can count on 4 hours of strong daylight per day, then you need 18/4=4.5kW system.
By strong I mean 800-1000 W per sq. M (normally available near the equator).
Based on the sourcing and quality of the equipment, the cost of such a system can be
between 4,500 to 6,000 USD.
Add the installation costs, that vary widely, depending on the country.
When you go for bigger, you should be able to get <1,000 USD/kW of installed capacity for the equipment.

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