The relatively low penetration of solar power generation in the global energy mix has prompted a U.S. technologist to predict the solar learning curve will lead to one-to-two-cent solar in “reasonably sunny” regions by 2030-35.
Clean energy investor and and technologist Ramez Naam extrapolated the decade-long price of electricity generated by utility scale solar projects built since 2010, and intended to come online up to the end of the year. With solar modules already following the path predicted by Wright’s Law – which suggests each doubling in manufacturing output leads to a fixed decrease in production costs – panel costs typically fall by a quarter for each doubling in production.
Naam examined global average non-panel costs – plus those in India, China and the U.S. – which contribute two-thirds of the levelized cost of energy generated by solar plants, and applied Wright’s Law to conclude the solar electricity price falls 30-40% for every doubling in deployment of solar generation capacity.
Historic price falls
“Solar has plunged in price faster than anyone, including me, predicted,” said Naam. “And modeling of that price decline leads me to forecast that solar will continue to drop in price faster than I’ve previously expected, and [it] will ultimately reach prices lower than virtually anyone expected. Prices that are, by any stretch of the measure, insanely, world-changingly cheap.”
Such price falls would see solar pass the tipping point for the energy transition when new solar projects are cheaper to establish than the running costs – marginal cost – of existing fossil fuel power generation facilities, even in an age of ultra-cheap natural gas.
With solar making up only 2% of the global power mix at the end of 2019, according to Naam, he expects the learning curve, or experience curve, which results from the application of Wright’s Law to continue at the same rate through at least two more doublings of PV capacity deployment, to a point when 2.4 TW of solar supply what would be 8% of today’s electricity demand. By that stage, Naam posits, the cost of solar electricity will have halved from today’s level.
The bottom line
“In the sunny parts of the world with low costs of capital, labor and land,” states Naam’s study, “we could routinely be seeing unsubsidized solar in the $0.01-0.02/kWh range. In California … we could be seeing unsubsidized solar at $0.025/kWh. In northern Europe, we could be seeing utility scale solar routinely priced at $0.04-0.05/kWh.
Source: pv magazine
