Solar Became Cheapest Fuel Source For Newly-Built Power Systems: EY

Solar Became Cheapest Fuel Source For Newly-Built Power Systems: EY

The latest report by Ernst and Young (EY) claimed that solar energy emerged as the cheapest fuel source for newly built power systems globally, fueling a faster energy transition. The report said that despite the challenges like inflation and price rises, solar power seemed to be the leader.

It claimed that with its lowest Levelized Cost of electricity (LOCE), it has surpassed other forms of renewable energy of other fossil fuels. The report showed that between 2010 and 2022, the highest drop in renewable power generation costs was reported in solar compared to onshore wind and offshore wind power.

The report claimed that during the period, the LCOE (US$/MWh) reduced by 88 percent for solar, 66 percent for onshore wind and 61 percent for offshore wind.  

“Solar is now the cheapest source of new-build electricity in many markets, even amid recent inflation and price rises. The global weighted average levelized cost of electricity (LCOE)1 for solar photovoltaic (PV) is 29% lower than the cheapest fossil fuel alternative. Large-scale energy storage — critical to an energy system dominated by renewables — is also quickly becoming more cost-competitive and sophisticated,” the report said. 

The EY report also said that the behaviour of power consumers has also transformed with time, with an increased inclination towards the adoption of solar power for their electricity needs. 

“ Our survey also found that 62% of people have bought, or are thinking about buying solar panels, and 50% are considering buying, or have already bought, battery storage,” the EY report said.

The report also said that renewable energy is set to become the new baseload by 2030. “We forecast renewable generation, mainly wind and solar, will become the new baseload — accounting for 38% of the power mix by 2030 and 62% by 2050. Globally, renewables will become the dominant power generation by 2038,” the report said.

The EY report added, “A global solar boom will power more than half of this, but adoption will vary across markets. Solar-generated power will become the biggest energy source in countries such as the US, and those in Oceania and South Asia, driven by technologies around solar PV modules advancing rapidly. The price of crystalline silicon PV modules has reduced by more than 80% since 2010.”