In June this year IRENA published its report “The Power to Change”, which assesses the potential for costs reduction in solar and wind power technologies by 2025. The report concludes that despite solar and wind power technologies being commercially available, they still have significant potential for cost reduction. In fact, by 2025 the global weighted average levelised cost of electricity (LCOE) for solar PV could fall by as much as 59% and the LCOE of CSP could drop by up to 43%. Onshore and offshore wind could see decreases of 26% and 35%, respectively.
With the right regulatory and policy frameworks, solar and wind technologies can still unlock significant additional cost reductions by 2025 and beyond. Cost reductions will be driven by increasing economies of scale, more competitive supply chains and technological improvements that will raise capacity factors and/or reduce installation costs. All of this will take place against a backdrop of increasing competitive pressures that will stimulate innovation.
Solar and wind technologies are benefiting from support policies that have seen deployment increase steadily and, in some cases, dramatically in the last ten years. This has helped create the market conditions for the cost reductions recently experienced. It also has set the stage for their costs to continue to fall through to 2025 and beyond. Read more…
Article published in: FuturENERGY September 2016