Renewable sources of energy – such as wind and solar – have only gotten cheaper over the last five years. That’s according to the latest study from the International Energy Agency, Projected Costs of Generating Electricity.
“This report clearly demonstrates that the cost of renewable technologies – in particular solar photovoltaic – have declined significantly over the past five years, and that these technologies are no longer cost outliers,” says IEA in the report.
Based on data from 181 power plants in 22 countries, the study found that the median cost of producing baseload power (the amount of power that is available all the time, save for maintenance) is about $100 per megawatt-hour (Mwh) for natural gas, coal and nuclear power plants. That figure is about $200 for solar – but that’s a $300 drop from where it was in 2010.
And the study predicts that that price will drop even further within the next 10 years. Utility-sized solar plants located in sunny regions could produce baseload power for less than $100 Mwh before 2025. Rooftop panels could do the same by 2030.
The future of fossil fuels, meanwhile, is not so sunny. As the costs of offshore wind and solar fall, the costs of coal-burning power plants are expected to rise by as much as 70 percent – if they include carbon capture technology. This is no surprise, however. Even without President Obama’s Clean Power Plan – which is expected to increase the costs of or shut down some 600 coal plants nationwide – the American coal industry has been in decline since the 1980s.
And while coal – still the cheapest if dirtiest energy source on the planet – remains prominent in developing countries, many countries are now shifting their attentions to cleaner means of generating electricity.
“[T]he vast majority of the technologies included in this study are low- or zero-carbon sources,” the IEA reports, “suggesting a clear shift in the interest of participating countries away from fossil-based technologies, at least as compared to the 2010 study.”