- According to the World Economic Forum, solar power is now cheaper than fossil fuels for new energy.
- Renewable energy has reached a tipping-point of sorts—massive investment, falling installation costs, and advancing tech is beginning to reap dividends. Now, a future of clean, renewable power is finally within reach.
Good Morning, Mr. Sun
When it comes to obtaining new energy, solar energy now costs less than fossil fuels, according to a report by the World Economic Forum (WEF). Data from Bloomberg New Energy Finance (BNEF) also show decreased prices, with the mean price of solar power in about 60 countries dropping to $1.65 million per megawatt, closely followed by wind at $1.66 million per megawatt.
Michael Drexler, Head of Long Term Investing, Infrastructure and Development at the World Economic Forum, found the downturn in prices to be an encouraging sign.
“Renewable energy has reached a tipping point—it now constitutes the best chance to reverse global warming. Solar and wind have just become very competitive, and costs continue to fall. It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”
The US Energy Information Administration estimated that roughly 9.5 gigawatts of solar capacity was added to the country’s grid, making it the year’s top energy source. More and more households and companies are also going solar, adding 1.7 gigawatts of installed capacity.
“Solar investment has gone from nothing…five years ago to quite a lot,” said Ethan Zindler, analyst for BNEF in an interview at Bloomberg.
Decreases in price could be attributed to a large number of factors, like falling installation and equipment costs, new business ideas, and a rise in cleaner energy policies. A noticeable upshot in investment for solar energy undoubtedly helped, with China putting in a whopping $103 billion—more than that of the US, the UK, and Japan combined. Though it’s still not up to the agreed $1 trillion at the Paris accords, we may well be on our way.
A Brighter Tomorrow
Incredible milestones have been set this year, particularly in developing countries. Energy company SolarPack closed a deal to offer solar power in Chile for just $29.1 per megawatt-hour, which is about 60% cheaper than using a new natural gas plant.
BNEF chairman Michael Liebrich believes in the future of greener energy sources. “Renewables are robustly entering the era of undercutting [fossil fuels].”
Of course, the use of dirty energy will not stop just because other forms are cheaper in some parts of the world, but the promise here lies in the gradual impact that reports like those the WEF and the BNEF make: that humanity is not doomed to use fossil fuels, and that cleaner, alternative energy sources are actually viable.
In the next decade or so, the price of solar energy is expected to fall to about half of what it costs to generate electricity from coal. And all these estimations reck nothing of the possibilities of futuristic energy sources that are still in research and development, and are yet far over the horizon. Nuclear fusion, for instance, would certainly change the rules of the game, though it is proving to be rather more difficult of attainment than previously thought; other conceivable power technology, such as space-based solar energy, are equally remote, though promising.
So this exciting new research, combined with more energy-efficient tech and dedicated government policies, will perhaps shift our path from a future of pollution and depleted resources, to one with fresh air, cleaner surroundings, and the promise of unlimited energy.