According to the International Energy Agency’s World Energy Outlook 2020, the world’s best solar power schemes now offer the “cheapest… electricity in history”. With the technology cheaper than coal and gas in most major countries.
In the best locations and with access to the most favourable policy support and finance, the IEA says that solar can now generate electricity “at or below” US$20 per megawatt hour (MWh), which is considerably less than coal or gas.
Estimated levelised costs of electricity (LCOE) from utility-scale solar with revenue support, relative to the LCOE range of gas and coal power. Source: IEA World Energy Outlook 2020.
On top of this, the cost of solar is set to fall further still. The IEA expects the cost could drop 65 per cent in the next two decades in India.
Tim Buckley, from the Institute for Energy Economics and Financial Analysis, said solar this cheap would be a “gamechanger”. “Within half the lifespan of a new coal-fired power plant, solar will be essentially free in one of the largest electricity markets in the world,” he said.
But how rapidly solar is taken up will be largely shaped by when COVID is brought under control, and whether governments pursue clean energy policies during the recovery, or stick with what they did before the pandemic.