Solar energy cheaper

Solar energy is converted into one of the cheapest and is positioned to exercise hegemony in price in the coming years

A report this week by Fraunhofer ISE, the largest research institute of solar energy in the world, delves into the study of the cost of solar energy in different regions of the world.

The most important conclusions reached by the study are:

  • Photovoltaic solar energy has now become a low-cost technology for electricity production. The energy cost of large-scale PV installations in Germany was reduced from over 40 ct € / kWh in 2005-9 ct € / kWh in 2014. Being even significantly lower in sunnier regions such as Spain.
  • Photovoltaic solar energy will soon be the cheapest form of electricity in many regions of the world. Even conservative scenarios and assuming no major technological advances, there is still a way to reduce costs. Depending on the hours of sunshine per year, the cost of electricity produced by photovoltaic technology will be reduced to between 4 and 6 ct € / kWh by 2025, reaching between 2 and 4 ct € / kWh in 2050 (conservative estimate).
  • The financial and regulatory environments will be key to reducing costs in the future. The cost of the material elements of facilities, from world markets, decrease regardless of local conditions. However, inadequate regulatory regimes can increase energy costs by up to 50 percent due to higher financing costs. This may even overcompensate the effect of improved local solar resources.
  • Most fundamentally scenarios underestimate the role of solar energy systems in the future. Based on cost estimates obsolete, most scenarios forecasting future systems of national, regional or global energy provide only a small contribution of solar energy. The analysis results indicate that Fraunhofer a fundamental review of these scenarios is necessary, based on actual costs that will develop different technologies for electricity production.

The study refers to Spain as a high irradiation, thus with an advantage for the production of electricity by photovoltaic solar weather. Given this climate advantage, the cost of producing electricity in Spain compared to Germany would be 50% lower. But the influence of the availability of capital at a moderate interest may cause the cost to skyrocket up to 50% higher. Given these circumstances the cost of energy (kWh) produced could be equal in Spain than in Germany, even allowing Spain to 50% more hours of sunshine.

Even so, the study estimates for Spain costs of electricity production from 1.8 to 3.1 ct € / kWh by 2050, about 10 times lower than what you currently pay for electricity in Spain.

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