Solar energy emerging as cheapest power source – that’s according to a new study published by Agora Energiewende, a leading German think-tank dedicated to the German energy transition. The report – Current and Future Cost of Photovoltaics – projects the costs of solar photovoltaic on a global scale from now to the year 2050. (Scroll down for full report).
According to the report, the cost of producing solar power in the UK will have declined to between 4.2 and 10.3p/kWh by 2025, and by 2050 to as low as 2.0 to 7.4p/kWh.
However, these reductions are highly reliant on financial and regulatory frameworks due to the high capital intensity of photovoltaic installations. Poor regulation could affect interest rates and raise the cost of solar plants by up to 50%, the report concludes.
It also says that most scenarios fundamentally underestimate the role of solar power in future energy systems by only foreseeing a small contribution from solar power. Agora says that a fundamental review of solar’s future role is necessary.
“The study shows that solar energy has become cheaper much more quickly than most experts had predicted and will continue to do so,” Agora Energiewende director Dr. Patrick Graichen said. “Governments that want to deliver lower cost energy for consumers should therefore reconsider their plans. Until now, most of them only anticipate a small share of solar power in the mix.
“In view of the extremely favourable costs, solar power will on the contrary play a prominent role. Favourable financing conditions and stable legal frameworks are vital conditions for cheap, clean solar electricity. It is up to policy makers to create and maintain these conditions.” Graichen added.