Solar Energy’s Dropping Costs Fuels Green Energy Investments
At the heart of the clean energy business there are the readily renewable options such as wind and solar (and marine tidal), requiring lesser construction related foundations, beyond equipment installation and operation than its counterparts, say hydro, geothermal, etc. Among these, solar has unarguably been the investment of choice in the last years, even more as solar panel prices continue to drop, as depicted by the publication Renewable Energy World early this year.
On the other hand, Zachary Shahan, Chief Editor and Director of CleanTechnica offered details of the fast dropping prices associated to solar power in an article dated February 11th, 2018, where he abounds on the subject of whether technological breakthroughs are necessary for solar to take over the electricity generation market. He stated then, “Various solar experts emphasized to me that known, predictable, incremental improvements in solar PV technology and manufacturing would keep bringing down the cost of solar PV — at an incredible clip. The standout point was from Jenny Chase of Bloomberg New Energy Finance (BNEF), who highlighted that her team forecast a solar module price drop from 62¢/watt in 2015 to 21¢/watt by 2040. That was with an assumption of no technological breakthroughs”.
At a Zayed Future Energy Prize review committee meeting reference is made to a discussion with analysts from BNEF who claimed solar power related prices had dropped much sooner than expected to approximately 40¢/watt.
Further insight from Jenny Chase identifies cumulative learning rate for manufactured crystalline silicone and general “fierce” competition as the main elements bringing down solar modules prices.
There is also additional input on the subject from BNEF’s founder Michael Liebreich, and Engie’s Executive Vice President of Engie of Research, Technology, and Innovation, “the unexpected solar price down-slide means that new solar is getting competitive with electricity generation from existing fossil and nuclear power plants”.
Improvements in solar cell and panel technology brought into production have eased costs and driven prices down strikingly, so that no ‘breakthroughs’ are necessary to make solar power more competitive than it is against fossil generated power, since solar is already at the crossroads where it is about to beat already built and operating coal, nuclear, and natural gas power plants.
The Trump Administration’s solar power market intervention is unlikely to stop the renewable energy drive for a larger piece of the global energy market pie, which the EU commission for energy sets “at least” at 27% by 2030. Yet, Adnan Z. Amin, Director-General of the International Renewable Energy Agency (IRENA) claims it will be reaching 34% instead.
However, the yet elusive answer to the question of the rate at which renewable solar and wind energy are replacing fossil-fuel generated power is beginning to clear up, as a report from IRENA shows.
In summary, a leap forward is being experienced as solar power overtakes in the market mix for renewable energy, and enters the competition with traditional fossil fuel-generated energy costs, promising substantial gains towards the goal of 1.5°C pre-industrial global warming limit. Such limit was set at the Paris Climate Agreement signed by 195 countries; however, the US withdrew on claims the accord puts American workers – particularly in the coal industry – at an “economic disadvantage”.