Solar power set to become cheapest energy resource by 2030
The amount of electricity generated using solar panels could rise by up to six times current rates by 2030, according to a report by the International Renewable Energy Agency. The Abu Dhabi-based group predicts photo-voltaic technology could produce between 8% and 13%, while others forecast as much as 15%, of global electricity, compared with 1.2% in 2015. The predictions come in the light of falling production costs and improvements in technology, allowing for easier storage of the electricity.

The amount of electricity generated using solar panels stands to expand as much as six-fold by 2030 as the cost of production falls below competing natural gas and coal-fired plants, according to the International Renewable Energy Agency.

Solar plants using photovoltaic technology could account for 8-13 percent of global electricity produced in 2030, compared with 1.2 percent at the end of last year, the Abu Dhabi-based industry group said in a report.

The average cost of electricity from a photovoltaic system is forecast to plunge as much as 59 percent by 2025, making solar the cheapest form of power generation “in an increasing number of cases,” it said.

Renewables are replacing nuclear energy and curbing electricity production from gas and coal in developed areas such as Europe and the U.S., according to Bloomberg New Energy Finance. California’s PG&E Corp. is proposing to close two nuclear reactors as wind and solar costs decline.

Even as supply gluts depress coal and gas prices, solar and wind technologies will be the cheapest ways to produce electricity in most parts of the world in the 2030s, New Energy Finance said in a report this month.

“The renewable energy transition is well underway, with solar playing a key role,” Irena Director General Adnan Amin said in a statement. “Cost reductions, in combination with other enabling factors, can create a dramatic expansion of solar power globally.”

Bloomberg New Energy Finance also forecasts growth in solar photovoltaics, reaching 15 percent of total electricity output by 2040, according to Jenny Chase, head of solar analysis in Zurich. “Irena’s assumptions are reasonable,” she said. “Solar just gets so cheap under any reasonable scenario.”

The “most attractive” markets for solar panels up to 2020 are Brazil, Chile, Israel, Jordan, Mexico, the Philippines, Russia, South Africa, Saudi Arabia, and Turkey, according to Irena. Global capacity could reach 1,760 to 2,500 gigawatts in 2030, compared with 227 gigawatts at the end of 2015, it said.

Smart grids, or power networks capable of handling and distributing electricity from different sources, and new types of storage technologies will encourage further use of solar power, Irena said.

As of 2015, the average cost of electricity from a utility-scale solar photovoltaic system was 13 cents per kilowatt hour. That’s more than coal and gas-fired plants that averaged 5 cents to 10 cents per kilowatt hour, according to Irena.

The average cost of building a solar-powered electricity utility could fall to 79 cents per watt in 2025 from $1.80 per watt last year, it said. Coal-fired power generation costs are about $3 per watt while gas plants cost $1 to $1.30 per watt, according to Irena.

The record for the world’s cheapest solar tariff was set in Dubai last month in an auction. MEED reported that a consortium including Masdar Abu Dhabi Future Energy Co. and Saudi Arabia’s Abdul Latif Jameel bid 2.99 cents per kilowatt-hour, 15 percent cheaper than the previous record.