Solar power is set to become the world's cheapest form of energy according to a new report from Bloomberg New Energy Finance.
The ‘Climatescope’ report highlights that unsubsidised solar is beginning to be a more viable market option than coal and natural gas on a larger scale and that new solar projects in emerging markets are costing less to build than wind projects.
The basis of the report is a study that shows the average cost of new solar has fallen below that of wind in 58 emerging market economies, a sharp decline in cost over the last six years which has seen solar energy become cheaper than wind power in emerging markets such as China and India.
The Climatescope report ranks and profiles emerging markets for their ability to attract capital for low-carbon energy projects.
The report from the Bloomberg New Energy Finance said that the average price of solar energy in these countries fell to $1.65m per megawatt, slightly below the price of wind energy at $1.66m per megawatt.
The figures correlate with the fact that emerging markets such as Brazil, China and India have spent more on renewable energy investment ($154.1bn) than the 35 member nations of the Organization for Economic Cooperation & Development (OECD) ($153.7bn), with the growth rates of clean-energy deployment higher in these emerging markets as they establish clean energy targets.
These developing nations do not have the capacity or necessary infrastructure to accommodate the use of fossil fuels, and are thus investing more in renewable energy such as solar.
The Climatescope report states that solar power will become the cheapest source of energy over the next 15 years, with the integral reason for the price fall being the decrease in installation costs.
Got solar on your roof? If not, you might soon.
The December 2016 report indicates that the cost of installing solar panels at solar farms and on rooftops is expected to decrease by 60% leading to an expected estimated cost of around 4c per kilowatt hour by 2040.
The recent report also predicts that the low cost of solar is expected to encourage solar panel installation to the point that solar could account for 43% of all new power generation added worldwide between now and 2040, representing $3tr of new investments.
The report also states that by 2040 15% of the world’s electricity will come from solar energy with a total investment of $135bn worth of investment to be made yearly into the solar infrastructure industry.
Tesla’s serious contribution
One of the companies looking to build on this turning point in world energy production is electric vehicle auto-maker Tesla, who has joined forces with Panasonic to begin manufacturing of photovoltaic (PV) cells and modules at its Buffalo factory.
These high-efficiency PV cells and modules will be used to produce solar panels. When production of the Tesla solar roof begins, Tesla will also incorporate Panasonic’s cells into the many kinds of solar glass tile roofs that the automaker will be manufacturing.
Production of the first PV modules will begin in mid-2017 and will increase to 1 Gigawatt of module production by 2019.
The collaboration between Tesla and Panasonic is the latest between the two companies which has included the production of electric vehicle and grid storage battery cells at the Tesla Gigafactory.