A new study from Bloomberg New Energy Finance finds that solar power is a much more competitive power option than many think. Basically, the technology has changed so fast that many people just don’t realize it’s such a good option now.
From Bloomberg: “Many decision-makers have yet to catch up with the improvements in the economics of solar power from recent reductions in the cost of the technology, a working paper released by the London-based research firm said today.”
In the past 3 years, solar power has grown four-fold. With this and also largely because of this, solar panel prices have dropped about 75% in that time. If you happened to check solar prices 4 years ago but not since then, that means you’ve got a pretty warped sense of the price of solar.
Solar power is now “competitive with daytime retail prices in at least five major economies,” Bloomberg notes. That includes world-leading Germany (where solar is at an extreme low now).
“This competitiveness is often underestimated because inadequate metrics are used to compare the costs of different energy sources. It has major implications for policy and investment decision-makers, the report’s authors from seven organizations and companies said.”
Of course, the price of solar compared to the price of fossil fuel alternatives still isn’t nearly accurate, since the societal health, environmental, and grid externalities of those other options still aren’t being internalized by fossil fuel companies. Those companies still are not forced to have their goods accurately priced in the marketplace. Additionally, the lifetime of a solar power system is still greatly underestimated when determining solar prices, further warping the true story. That issue was not addressed in the report.
“The authors’ aim is to inform policy-makers, utility decision-makers, investors and advisory services, in particular in high-growth developing countries, as they weigh the suite of power generation options available to them,” Bloomberg New Energy Finance itself writes. “The paper is being submitted for publication in the peer-reviewed literature.”
The authors of the report include: Morgan Bazilian and Ijeoma Onyemi of the United Nations Industrial Development Organization; Michael Liebreich and Jenny Chase of Bloomberg New Energy Finance; Ian MacGill of the University of New South Wales; Jigar Shah of KMR Infrastructure; Dolf Gielen of the International Renewable Energy Agency, IITC; Doug Arent of the Joint Institute for Strategic Energy Analysis; Doug Landfear of AGL Energy; and Shi Zhengrong of Suntech Power Holdings.
Check out the full working paper, Reconsidering the Economics of Photovoltaic Power, at Bloomberg New Energy Finance.
Source: Bloomberg
Image: solar panels & money via Shutterstock
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