Solar power cheapest new form of energy in nearly 60 countries
Donald Trump and the climate deniers and fossil fuel company backers he’s nominated for his cabinet don’t realize it—or refuse to believe it—but the world is starting to pass them by when it comes to developing new sources of power. In the developing world, solar power is becoming the most cost-effective new source of electricity.
In nearly 60 lower-income countries, the average price of solar energy has dropped to $1.65 million per megawatt in 2016, just below wind at $1.66 million per megawatt. That means new energy development projects will focus on solar energy rather than wind power.
“Unsubsidized solar is beginning to outcompete coal and natural gas on a larger scale, and notably, new solar projects in emerging markets are costing less to build than wind projects,” says a report from Bloomberg New Energy Finance, a research and analysis organization for those investing in the energy industry.
This year has seen a remarkable run for solar power. Auctions, where private companies compete for massive contracts to provide electricity, established record after record for cheap solar power. It started with a contract in January to produce electricity for $64 per megawatt-hour in India; then a deal in August pegging $29.10 per megawatt-hour in Chile. That’s record-cheap electricity—roughly half the price of competing coal power.
“Renewables are robustly entering the era of undercutting” fossil fuel prices, BNEF Chairman Michael Liebreich said in a note to clients.
Undercutting fossil fuel prices. In other words, doing it more cheaply. And when you’re building a new infrastructure for electricity with limited resources—and you’re a country with abundant sunshine—you go with the least expensive option. And that ain’t coal, gas, or oil.
This chart from Bloomberg New Energy Finance shows the average cost of new wind and solar projects from 58 emerging-market economies. The countries studied include China, India, and Brazil.
The low-cost contracts discussed in the Bloomberg report are for new projects. It adds:
When all the 2016 completions are tallied in coming months, it’s likely that the total amount of solar photovoltaics [PVAs] added globally will exceed that of wind for the first time. The latest BNEF projections call for 70 gigawatts of newly installed solar in 2016 compared with 59 gigawatts of wind.
The overall shift to clean energy can be more expensive in wealthier nations, where electricity demand is flat or falling and new solar must compete with existing billion-dollar coal and gas plants. But in countries that are adding new electricity capacity as quickly as possible, “renewable energy will beat any other technology in most of the world without subsidies,” said Liebreich.
This new development of cheaper solar power is being described as a turning point in the energy industry. “The world … is adding more capacity for clean energy each year than for coal and natural gas combined. Peak fossil-fuel use for electricity may be reached within the next decade,” according to the story in Bloomberg.
Another story about the report in Science Alert discussed how the growth in solar marks some new milestones.
It’s also worth noting that prices fluctuate across the world, and solar isn’t the cheapest deal everywhere just yet — the cost depends on sunshine availability, plus the energy contracts that are already in place, and what government subsidies are on offer.
But it’s still a landmark moment for new energy costs in developing nations, and goes hand-in-hand with renewable energy now having become the largest source of new power capacity in the world. …
Last year, China invested $103 billion in solar projects, more than the US ($44.1 billion), the UK ($22.2 billion), and Japan ($36.2 billion) put together.
Other points from the Climatescope report:
- Steep solar equipment cost efficiencies are catalyzing build and driving economic growth.
- Cheap solar, innovative business models, and a new breed of entrepreneurs are revolutionizing how energy access issues are addressed in least developed nations.
- Developed economies are accelerating funding for clean energy in emerging markets.
- Clean energy policies are becoming more widely adopted across Sub-Saharan Africa.
- In ranking and profiling emerging markets for their ability to attract capital for low-carbon energy projects, the top-scoring markets were China, Chile, Brazil, Uruguay, South Africa, and India.
There are other reports of the growth of solar energy. The World Economic Forum released a report in December 2016 detailing the boom in renewable energy investment. Coal is still the world’s biggest supplier of energy, but oil is dropping quickly, and renewable energy is showing the greatest growth. “Solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries,” says an online story on the WEF report in Quartz.
As prices for solar and wind power continue their precipitous fall, two-thirds of all nations will reach the point known as “grid parity” within a few years, even without subsidies. “Renewable energy has reached a tipping point,” Michael Drexler, who leads infrastructure and development investing at the WEF, said in a statement. “It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”
Those numbers are already translating into vast new acres of silicon and glass. In 2016, utilities added 9.5 gigawatts of photovoltaic capacity to the U.S. grid, making solar the top fuel source for the first time in a calendar year, according to the US Energy Information Administration’s estimates. The U.S. added about 125 solar panels every minute in 2016, about double the pace last year, reports the Solar Energy Industry Association.
As James Rado and Gerome Ragni wrote in the 1967 musical Hair, “Let the Sunshine In.” The words were for a different context, but they seem strangely prophetic today.:
Walking proudly in our winter coats
Wearing smells from laboratories
Facing a dying nation of moving paper fantasy
Listening for the new told lies
With supreme visions of lonely tunes.