Donors and multilateral investment agencies have been dramatically overestimating the levelized cost (LCOE) of photovoltaic solar-plus-storage solutions in developing countries, a UK-based company asserts, an error that is deterring the advantageous buildout of low-cost clean power.
Donor and investors are assuming “a rough cost of anything from US$5 up to $10 per watt of PV power,” according to Jordan Fast of international solar project developer Crown Agents. Most envisage “a traditional, lead-acid-based, ‘dumb’ solar technology model.” These tend to be oversized to compensate for inefficiencies, and require “independent, climate-controlled buildings to house the battery banks.”
But modern, state-of-the-art systems, using lithium-ion batteries and placed in existing buildings, “could bring costs down significantly, perhaps to as little as $2 per watt.” The projected lifespans of solar-plus-storage components are also lengthening to as long as 25 years, producing power at a lifetime cost “that is competitive with diesel generation in many areas”.
According to Crown, “the LCOE for new off-grid or grid-tied distributed solar-plus-storage could come down to less than 20¢ per kilowatt-hour, a third the price of diesel and petrol generators.” And, Fast asserted, those estimates are conservative, based on diesel at $1 to $2 per litre, when in some places the fuel costs up to $4.
Crown Agents, Greentech Media reports, “is looking to validate its cost analysis with a rollout of distributed energy systems across a dozen health centres in Zimbabwe,” with the first performance results expected in early 2018.
As recently as October, the International Renewable Energy Agency (IRENA) projected that global energy storage costs could fall by a further 66% by 2030, driven by a doubling in renewable energy capacity.