Based on information from Bloomberg New Energy Finance (BNEF), in 58 developing countries including Brazil, China and India, going solar has now dropped to nearly one third of what it cost 6 years ago (in 2010). In fact, it’s even less expensive than wind power.
Although it’s still a long way off from being the cheapest form of energy in the entire world, it’s encouraging to know that the number of countries where it is cheaper to generate electricity by using solar power rather than using fossil fuels is on the rise.
Similarly, a report released by the World Economic Forum (WEF) also stated how much the price of renewable technologies, specifically solar power, has dropped to a record low. Compared with coal and natural gas which supplies electricity at an average cost of $100 per megawatt-hour, solar cost has plunged from $600 ten years ago, to $300 five years later, and now to less than $100.
The WEF also says that unsubsidized grid parity has been achieved by over 30 countries already. Grid parity is the term used to signify that an alternative power source is already capable of generating power at a cost that’s equal or lower than what a traditional power grid can provide. Some nations which have now reached grid parity include Australia, Brazil, Chile, Mexico and several more. With the way things are going, the WEF is confident that in a few more years, around two-thirds of the world’s nations will reach grid parity. And by 2020, solar energy will be the cheapest form of energy across the globe.
Solar energy is becoming cheaper and more popular for several reasons including reduced manufacturing and production cost (especially when China entered into the picture as a major supplier); increase in the number of investors and amount of investment; governments subsidizing installation expenses; international treaties and local legislation requiring a certain percentage of energy to come from renewable resources; and rapid improvements in technology. There was even an auction held in Chile which motivated service providers to bid for the lowest cost they can offer solar power for so they can win contracts. The latest was held last August and the lowest contract price offered then was for $29.10/megawatt-hour, nearly half the cost of coal-based power.
And yet, despite these developments, we’re still a long way off from accomplishing desired renewable energy levels that can significantly curb the threat of global warming. In simplest terms, global support for solar energy is still insufficient, particularly in terms of investments, standardized procedures, and regulatory conditions.
Considering the alarming effects of climate change we’ve already seen and felt, it’s a bit disappointing that we’re not as aggressive as we need to be to work towards the resolution of this threat. But it’s a brand new year — it’s the best time for new beginnings and renewed hope. There’s much that needs to be done. But through universal cooperation, we might just be able to save our world yet.