The average costs for electricity generated by solar and wind technologies could decrease by between 26% and 59% per cent over the next 10 years, according to a new 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 realise cost reductions to 2025 and beyond.
It estimates that by 2025, average electricity costs could decrease 59% for solar photovoltaics, 35% for offshore wind, and 26% for onshore wind compared to 2015.
Electricity prices for concentrated solar power could also decrease as much as 43%, depending on the technology used.
Adnan Amin, Director-General of the International Renewable Energy Agency, said: “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.
“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.”
Since 2009, prices for solar PV modules and wind turbines have fallen by 80% and 30% respectively.
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.
Amin added: “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.”
‘The Power to Change’: http://bit.ly/233POFQ