Power Prices, Solar - January 5, 2017
Bloomberg: Solar to become cheapest power source
Though solar generated power is already cheaper than coal in some parts of the world, new data from Bloomberg New Energy Finance suggest that may be the case globally, on average, by 2025.
Bloomberg News reported Jan. 2 that in countries such as Chile and the United Arab Emirates, record-breaking solar deals were signed in 2016 at less than 3 cents per kWh. Globally, Bloomberg reported, solar prices have dropped 62% since 2009 as costs have been cut across the industry's supply chain, which led to declining risk premiums on bank loans and increased manufacturing levels.
Citing BNEF head of solar analysis Jenny Chase, the news agency reported that the average 1 megawatt-plus ground mounted solar system will cost 73 cents per watt by 2025, marking a 36% drop compared to the current $1.14 per watt. That estimate is roughly in line with other forecasts for solar, including GTM Research, which Bloomberg said has some parts of the U.S. Southwest approaching $1 a watt today, with a potential drop to 75 cents by 2021. The article also highlights estimates from the U.S. Department of Energy and the U.S. EIA.
The speed at which the price of solar will drop below coal varies in each country. Places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before. Countries with large domestic coal reserves such as India and China will probably take longer.