The International Renewable Energy Agency (IRENA) has released the Renewable Power Generation Costs in 2019 report, which finds that renewable electricity costs have fallen sharply over the past decade, driven by improving technologies, economies of scale, increasingly competitive supply chains and growing developer experience.
According to the latest cost data from IRENA, the global weighted-average levelised cost of electricity (LCOE) of utility-scale solar photovoltaics (PV) fell 82% between 2010 and 2019, from around USD 0.378/kWh toUSD 0.068/kWh in 2019, with a 13% reduction year-on-year in 2019.
This reduction has been primarily driven by declines in module prices – which have fallen by around 90% since 2010 – and balance of system costs.
Report’s highlights on solar PV
- At an individual country level, the weighted average LCOE of utility-scale solar PV declined by between 66% and 85% between 2010 and 2019.
- The cost of crystalline solar PV modules sold in Europe declined by around 90% between December 2009 and December 2019.
- The global capacity weighted-average total installed cost of projects commissioned in 2019 was USD 995/kW, 79% lower than in 2010 and 18% lower than in 2018.
- Solar PV capacity grew 14-fold between 2010 and 2019, with 580 GW installed at the end of 2019.
- The total installed costs in the residential rooftop PV market are higher than utilityscale due to their small size, but decreased by between 47% and 80% between 2010 and 2019 depending on the market.
- Total installed system costs in the commercial rooftop markets where data is available decreased by between 64% and 86% between 2010 and 2019.
- On average, in 2019, balance of system costs (excluding the module and inverter) made up about 64% of total installed costs.
- The global weighted-average capacity factor for new, utility-scale solar PV, increased from 13.8% in 2010 to 18.0% in 2019. This was predominantly driven by the increased share of deployment in sunnier locations.
New renewable power generation projects now increasingly undercut existing coal-fired plants. On average, new solar photovoltaic (PV) and onshore wind power cost less than keeping many existing coal plants in operation, and auction results show this trend accelerating – reinforcing the case to phase-out coal entirely. Next year, up to 1 200 gigawatts (GW) of existing coal capacity could cost more to operate than the cost of new utility-scale solar PV, the report shows.
Replacing the costliest 500 GW of coal with solar PV and onshore wind next year would cut power system costs by up to USD 23 billion every year and reduce annual emissions by around 1.8 gigatons (Gt) of carbon dioxide (CO2), equivalent to 5% of total global CO2 emissions in 2019. It would also yield an investment stimulus of USD 940 billion, which is equal to around 1% of global GDP.
Recent auctions and power purchase agreements (PPAs) show the downward trend continuing for new projects are commissioned in 2020 and beyond. Solar PV prices based on competitive procurement could average USD 0.039/kWh for projects commissioned in 2021, down 42% compared to 2019 and more than one-fifth less than the cheapest fossil-fuel competitor namely coal-fired plants. Record-low auction prices for solar PV in Abu Dhabi and Dubai (UAE), Chile, Ethiopia, Mexico, Peru and Saudi Arabia confirm that values as low as USD 0.03/kWh are already possible.
Source: Press Release by IRENA.