Solar Power Costs Dipped 87% Globally In Last 10 Years: Study

Solar Power Costs Dipped 87% Globally In Last 10 Years: Study UPNEDA Sets Sights on Selecting Solar Power Developers for 500 MW Rooftop PV Project

A recent report by the Mercator Research Institute on Global Commons and Climate Change claimed that the cost of electricity from solar power globally has fallen by 87 percent in the last 10 years. At the same time, the cost of battery storage plummeted by 85 percent during the same period. 

The recent innovation in technology has played a complementary role that goes beyond solar. For instance, in the past 10 years, the cost of electricity from wind has fallen by 38%, and from battery storage by 85%. In wind and solar, the cost has grown from 1.4 % of the global electricity supply in 2009 to 10.2 % in 2021. It is reported to continue to grow, as a variety of new countries adopt them, as per the report.

The report also foresees that the battery storage price will drop from current 100 percent to 28 percent in 2030. This is based on the current trend involving closing down the existing coal and replacing it with a solar battery system. The report further applauded the success in making 80 percent of the private investment fossil fuel-free.

The report describes pricing as a major challenge faced in the fight against global heating. The report shares details on the emerging prospects for developing new fossil-free products that can bring a price drop with the opening up of new pathways. As per the report, bringing solar along with other renewable products technology would make solar power more accessible, bring down the price of solar battery storage, and make the process cost-effective.

In 2050, experts expect to achieve this by bringing in 63,000 terawatt hours of solar energy. The report suggests that it will be available worldwide with twice as much as the supply of coal today. However, as per the research institute report, the current political economy of coal and other considerations such as jobs, tax payments, political constraints, or financial liquidity, prevent governments from investing in renewable energy even when it has a better pay-off.

For example, the report highlights the need for a comprehensive structural change towards making climate transition cheaper. The report elaborates on the structural change within the use of solar cells, batteries, heat pumps, and wind turbines. The report measures the pace of innovation in solar to be greater than in classic large-scale systems.

The report also includes the use of new suppliers that have a success in providing energy-saving solutions in everyday consumption. For example, it suggested the use of vegan schnitzels in the supermarket and the use of e-scooters on the road to the all-in-all device in the electrical shop.

The report identifies the importance of bringing change through granular technologies – which involves bringing solutions through simple elements like Lego bricks to form larger systems. The report also evaluates the sector coupling (direct and indirect electrification of transport, heating, and industry). It elaborates with examples such as energy-efficient system technology that stores green electricity – for example in e-cars, synthetic gases for industry, or e-fuels for aircraft and ships. For example, in the case of Huawei, the use of PV plus battery storage allows a rate of return of 9% in Hawaii and 4% in Germany as per the report.

In the battery storage, the report indicates that the cost of the battery costs stands at ($350/kWh, 15 years lifetime), and adding storage doubles LCOE, compared to PV only. On the other hand, the household costs of electricity vary across different locations worldwide due to continued battery innovation through 2030 ($200/kWh, 30 years lifetime) resulting in a system cost 28 % above a PV-only system, as per the report.

The report evaluates the transition from the profit reaped by the firms, from shutting down the existing coal plants and from replacing them with new hybrid solar-battery systems. In markets with no carbon price or other climate policy and an increasing number of places are building new and cheaper solar than the operating costs incurred in the coal plants, as per the report.

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