The cost of “renewables” technology stands to keep falling into the next decade, boosting the economic case for clean energy.
The average cost of electricity from a photovoltaic system is forecast to plunge as much as 59 percent by 2025, according to a report yesterday by the International Renewable Energy Agency (IRENA).
The technology last year produced energy that was already 58 percent cheaper than it was in 2010, the Abu Dhabi-based industry group said.
“Historically, cost has been cited as one of the primary barriers to switching from fossil-based energy sources to renewable energy sources, but the narrative has now changed,” IRENA director-general Adnan Amin said in a statement.
“This further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables,” Amin said.
IRENA projects that energy from solar thermal power plants will be about 40 percent cheaper by the middle of next decade.
Offshore wind might see cost reductions of 35 percent, followed by onshore wind at 26 percent, it said. The cost of building energy facilities for sources of renewable energy is also expected to fall, with solar photovoltaic projects costing as much as 57 percent less by 2025 than they did last year.
The drop is expected to be driven by technological improvements and increased economies of scale as manufacturers expand operations, the report said.
“We’ve experienced a golden era for equipment cost reduction in solar photovoltaic and onshore wind,” said Michael Taylor, lead author of the report who is also an analyst at IRENA. “Now we’re seeing a lot of opportunity to reduce the non-equipment cost.”
Manufacturers in China such as Sungrow Power Supply Co (陽光電源) and Huawei Technologies Co (華為) are offering products “well below” global averages, IRENA said.
State-run auction systems are also playing a role in pushing down the price of electricity from “renewables,” it said.
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