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The cost of solar power continues to fall

After a 90 percent cut over the past two decades, solar prices are looking at another 15-25 percent cut by the end of 2030. Wood Mackenzie data.

In years past, government subsidies lent a powerful hand to the global PV market. Today, those generous subsidies are waning, giving way to downward auctions and new long-term trading arrangements. And despite the profound change taking place, the cost of solar power continues to fall. Since 1991, this item has dropped 90%; by 2030 it will take another 15-25% cut. The estimates belong to Wood Mackenzie’s latest report, titled Total eclipse: how cost reduction will ensure solar’s dominance in the energy sector.

The paper defines the photovoltaic sector as “highly investible,” meaning from high attractiveness to investors, due to its renewed ability to meet both economic and policy objectives. “As the world seeks to recover from the economic crisis triggered by Covid-19 while simultaneously meeting climate goals […] solar is in a unique position to advance decarbonization efforts,” explains Wood Mackenzie’s director of research, Ravi Manghani.

Even with the pandemic, global installations exceed 115 GW in 2020. By comparison, new capacity installed globally in 2006 was just 1.5 GW. The technology already represents the cheapest form of new electricity generation in 16 states in the U.S., plus Spain, Italy and India. By 2030, the rest of the U.S., as well as Canada and China, will join the group.

Three technologies to watch
The cost of solar power is the main driver of this trend. “PV is becoming so competitive that it is not only a means of decarbonization for corporations, but also a way to reduce energy expenses for their operations,” Manghani added.

Over the next decade, Wood Mackenzie predicts that greater cost reductions will be driven by the growth and development of various technologies:
– Double-sided panels: New solar cell technology allows both sides of a panel to generate power, up to 15% more.
– Larger solar modules: Creating panels with larger surface areas results in greater output gains.
– Trackers: Tracking and tracking systems change the alignment of panels throughout the day, increasing energy capture.

Operating costs are also expected to decrease over the next decade. Technologies, already widely used by the wind industry, such as the use of drones and thermography for tracking, will make operations more efficient. Big help will also come from artificial intelligence.

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