Solar and wind electricity costs could fall by another 26 to 59% between 2015 and 2025 with the right regulatory and policy frameworks in place, the International Renewable Energy Agency (IRENA) reported earlier this week.
The agency’s analysis shows global weighted average costs falling 59% for solar photovoltaics, a technology that is already winning competitive bids against non-renewable electricity. IRENA foresees concentrating solar power costs falling by 37 to 43%, offshore wind by 35%, and onshore wind by 26%.
“Increasing economies of scale, more competitive supply chains, and further technological improvements will continue reducing the costs of solar and wind power,” the Abu Dhabi-based association states. “The same factors will also boost the availability of these key renewable power sources at night and in varying weather conditions.”
“Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables,” said IRENA Director-General Adnan Z. Amin. “Historically, cost has been cited as one of the primary barriers to switching from fossil-based energy sources to renewable energy sources, but the narrative has now changed.”