Is solar energy actually very cheap?
Many of us may conclude that the reason so much electricity is still produced by gas and coal power plants is basic economics: these fuels are less costly. However, although this theory was once right, it has been debunked by a recent drop in solar and wind energy prices over the last decade.
Onshore wind and solar are also the cheapest sources of electricity from modern power stations, consuming less than natural, geothermal, coal, or nuclear power. Solar Bahrain companies are providing cost effective consultancy and installation services for your solar needs.
Solar, in fact, has fallen in price at a breakneck rate. It was the most expensive choice for developing new energy development just ten years ago. According to data from the Leveled Cost of Energy Study, which was recently highlighted by Our World in Data, the cost has fallen by 90 percent since then.
Utility-scale solar arrays are currently the most cost-effective solution for both construction and operation. Wind power has also seen a drastic decrease in prices, with new wind plant lifetime costs dropping by 71% in the last decade.
Natural gas prices fell around that period as well, but by a smaller amount—32 percent—due to the latest shale boom rather than a longer-term pattern like renewables, according to the report. For the last decade, the cost of constructing coal plants has remained largely constant.
The source of low prices
According to the paper, solar became affordable due to powers such as learning curves and virtuous cycles. The cost of harnessing the sun’s strength was once so prohibitive that it was only used by satellites. The cost of one watt of solar power in 1956, for example, was $1,825. (At the moment, utility-scale solar can be as inexpensive as $0.70 per watt.)
However, this could change in the near future. The cost of adding extra power to current fossil fuel plants is becoming highly competitive with the cost of installing new renewables. The lifetime costs of electricity (including subsidies) in the 2020 Lazard report are $31 per megawatt-hour for utility solar and $26 per megawatt-hour for wind. The cost of rising capacity for coal was $41 and for natural gas it was $28.
Batteries and water can store electricity, and improved transmission networks can be installed, so these problems of intermittency and geography are not insurmountable. However, major investments would be needed to construct and install the necessary infrastructure.
Renewables and their now-affordable costs will eventually have their moment in the middle of pandemic-induced high unemployment and low interest rates. Click here now for more information about the rates.