Though boom in solar energy industry started more than a decade ago, but the price is decreasing significantly in last few years. Moreover, the plunge is giving the industry an extra edge against coal and fossil fuel. Countries like Germany and China are leveraging the boost. Interestingly, the price decreased to $100 per MWh. However, on this phase, the question is can solar energy be the cheapest power on earth?
Solar energy is the cheapest power
Environmena Power Systems’ CEO Sami Khoreibi shared via Bloomberg that “we are 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”.
According to a report by Jessica Shankleman and Chris Martin of Bloomberg, one just needs to spend less 3 cents to generate kilowatt-hour from the sunshine. Factually, that is half of the cost of rate of average global coal power price.
From Bloomberg New Energy Finance we learn that by 2025, on average globally, solar will be cheaper than coal, probably. The research organization’s claim seems more realistic considering the fact that solar price is actually 62 percent down since 2009. One of the key reasons behind such boil-down in price in the industry is technological advancement. Betterment and advancement in technology are bringing price reduction and boosting the industry. Jenny Chase, head of solar analysis for New Energy Finance states specific numbers that the average 1 megawatt-plus ground-mounted solar system will cost 73 cents a watt by 2025 while the current price is $1.14. To simplify it is a 36 percent drop.
Solar energy’s availability at the lowest rate seems more plausible when the U.S. Energy Department’s National Renewable Energy Lab shows its high expectation. The government department forecasts costs per watt will be declining from $1.120 to $1 by 2020.