Solar Could Beat Coal to Become the Cheapest Power on Earth

Generating energy from solar power—in the form of photovoltaics—is now cheaper than burning coal in some parts of the world. In less than a decade, it’s could very well be the lowest-cost option almost everywhere.

Since 2009, solar prices have gone down 62 percent (with the price of just the photovoltaic panels alone down by 80 percent). Every part of the photovoltaic supply chain is trimming costs—which is helping to cut risk premiums on bank loans, and pushed manufacturing capacity to even higher. At this rate, by 2025, solar is likely to be cheaper than using coal on average globally, according to this article in Bloomberg New Energy Finance.

“These are game-changing numbers, and it’s becoming normal in more and more markets,” said Adnan Amin, director general of the International Renewable Energy Agency, an Abu Dhabi-based intergovernmental group. “Every time you double capacity, you reduce the price by 20 percent.”

Of course, the coal industry is quick to rebut those numbers; coal industry spokesmen point out that cost comparisons involving renewables don’t take into account the need to maintain backup supplies that can work when the sun doesn’t shine or wind doesn’t blow.

Even so, solar’s plunge in price is starting to make the technology a plausible competitor. China, the biggest solar market, will see costs falling below coal by 2030, according to New Energy Finance. China has now surpassed Germany as the nation with the most installed solar capacity as the government seeks to increase use to cut carbon emissions and boost home consumption of clean energy, says Bloomberg.