Energy Report Global report on solar and wind energy
According to a report released by the International Renewable Energy Agency (IRENA), average costs for solar and wind electricity could fall 59% by 2025.
The average costs for electricity generated by solar and wind technologies could decrease by between 26 and 59 per cent by 2025, according to a recently released report by the International Renewable Energy Agency (IRENA). The report “The Power to Change: Solar and Wind Cost Reduction Potential to 2025” finds that with the right regulatory and policy frameworks in place, solar and wind technologies can continue to realize cost reductions to 2025 and beyond.
Trend from recent years continues
It estimates that by 2025, average electricity costs could decrease 59 per cent for solar photovoltaics (PV), 35 per cent for offshore wind, and 26 per cent for onshore wind compared to 2015. Electricity prices for concentrated solar power could also decrease as much as 43 per cent, depending on the technology used. By 2025, the global average cost of electricity from solar PV and onshore wind will be roughly 5 to 6 US cents per kilowatt hour.
“We have already seen dramatic cost decreases in solar and wind in recent years and this report shows that prices will continue to drop, thanks to different technology and market drivers,” said IRENA Director-General, Adnan Z. Amin. “Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables.”
The way ahead
Since 2009, prices for solar PV modules and wind turbines have fallen roughly 80 per cent and 30 to 40 per cent respectively. With every doubling of cumulative installed capacity, solar PV module prices drop 20 per cent and the cost of electricity from wind farms drops 12 per cent, owing to economies of scale and technology improvements. Importantly for policy makers, cost reductions to 2025 will depend increasingly on balance of system costs (e.g. inverters, racking and mounting systems, civil works, etc.), technology innovations, operations and maintenance costs and quality project management. The focus in many countries must therefore shift to adopting policies that can reduce costs in these areas.
“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,” said Amin. “To continue driving the energy transition, we must now shift policy focus to support areas that will result in even greater cost declines and thus maximize the tremendous economic opportunity at hand.”
About the International Renewable Energy Agency (IRENA)
IRENA is mandated to be the global hub for renewable energy cooperation and information exchange by 148 Members (147 States and the European Union). Roughly 28 additional countries are in the accession process and actively engaged. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.