The IEA Confirms That Solar is Now The Cheapest Energy in History

“Solar is Now The Cheapest Energy in History”, according to a report by the IEA

This article put together by the team at Practically Green

The World Energy Outlook for 2020 and beyond has been produced by the International Energy Agency. It was a 464-page report that covered a variety of predictions and observations on the global energy sector’s current path and anticipated future. 

Notably, the International Energy Agency (IEA) has declared solar to be the cheapest electricity source in history, claiming that it has become cheaper than coal and gas for most large countries.

The debate over fossil fuels vs. renewables frequently boils down to cost; advocates of coal argue that it is the cheapest source of electricity. The reputable International Energy Agency (IEA) has validated this perspective every year. Each year, the organization releases an energy forecast that governments use to make policy decisions. This forecast is used by governments all over the world.

This year, the organisation confirmed for the very first time that power generated by solar photovoltaics (solar panels) is more affordable in most countries than electricity generated by coal or fossil fuel plants. This is wonderful news for renewable energy, but bad news for coal’s future. According to them, solar power currently provides some of the cheapest energy yet seen.

Solar can now create power at or below $20 MWh

Indeed, according to the IEA, it is significantly cheaper than coal or gas, especially in places with access to some of the most favorable policy assistance and finance. This is solar that includes “revenue support systems” like price guarantees.

Furthermore, the cost of solar energy is expected to continue to decrease. The IEA predicts a 65 percent cost reduction in India over the next two decades. Solar at this price, according to Tim Buckley of the Institute for Energy Economics and Financial Analysis, would be a gamechanger.

Within half the time it takes for a new coal-fired power plant to come online in one of the world’s largest electric marketplaces, solar will be almost free. “It’s about the economy, all about the money flows, and global capital is pouring into renewables while fleeing fossil fuels. ” Tim said.

Solar is Now The Cheapest Energy in History: solar array with city in background

Solar is now the world’s new ruler of electricity markets

When the COVID-19 pandemic is over, whether countries follow clean energy measures during the economic restoration or continue to do what they did before the epidemic will determine how quickly solar will be adopted. 

There are a lot of decisions to be made about energy policy right now, and they could either help the world reach net zero emissions by 2050 or make it more likely that most countries will not meet their Paris Agreement goals.

Researchers propose different possible future scenarios. In one, COVID is brought under control by 2022 and the world will continue on as before, with energy consumption battling back. Renewables will cover 80% of the rise in global electricity demand by 2030, with eight out of ten megawatts of new power coming from renewable sources.

That is a conservative scenario in which governments do not push for more sustainable energy than they have in the past. According to the research, solar and wind energy will rise dramatically in the next few years, according to IEA chief Dr. Fatih Birol. He stated, “I see solar as the new monarch of the world energy market.” 

For one thing, there are vast fields of solar panels. The Indian state of Gujarat has started building solar panels on 60,000 hectares of land that isn’t used for farming, which is about the size of 60,000 football fields.

Under the first scenario, according to the IEA, hydropower would continue to be the largest renewable source of electricity until 2030, but only because there is currently so much of it. Solar will account for the majority of renewable energy growth. Studies anticipate that after 2022, solar will keep setting new installation records every year, with onshore and offshore wind following behind.

In a different scenario, the epidemic is not brought under control until 2025, and energy consumption remains low. Coal would be left behind much more. For the first time since the Industrial Revolution, its share of the world’s energy mix would have slipped below 20 percent by 2040.

The existing policy parameters are used to create these two scenarios. The other two possibilities show what would occur if nations enacted renewable energy policies and sought a “sustainable recovery” to achieve carbon objectives, as the agency describes it. According to the report, this would necessitate “consistent efforts from all” at a time when the world is still recovering from COVID-19.

This would result in a significant drop in coal consumption

By 2030, worldwide coal usage for energy would have decreased by 10% under the business-as-usual scenario. It would fall by half with a long-term recovery. 

“It’s still big in either case,” Mr. Buckley remarked. “The paradox is that we’re trying to get new coal mines permitted for export in Australia while global consumption is down 10% to 50%. Why are we releasing more merchandise at a time when the market is getting smaller?”.

crowd at solar panels discussing technology

The good news could get much better as solar technology improves and becomes more affordable

Solar panels are now being researched for higher output from smaller panels, reduced manufacturing costs per panel, longer life, and better recycling and reuse plans. As the quality of these parts improves, the cost of solar panels decreases, enabling more usage of the renewable energy source.

All financial analyses were performed on corporations that were constructing new solar energy projects, not small-scale solar projects. In brief, because of the reduced cost of construction, solar energy is the most cost-effective kind of energy for utility companies.

The International Energy Agency (IEA) thinks that better technology, risk-reducing policies and a few other factors show that this renewable resource has a bright future.

Bottom Line: Solar is Now The Cheapest Energy

One of its main points is that we must all strive to achieve Net Zero as consumers, corporations, and nations. It may not always be an easy goal to achieve, but it is quite possible if we keep the pressure on. The International Energy Agency is eager to point out that it will need “extraordinary” initiatives from all sectors, not just the power industry. The IEA believes that with improved technology and risk-reduction strategies, this renewable resource will have a great future.