The incredible dwindling cost of solar energy

While our politicians meet at the IFEMA to not agree on anything and the media make headlines with the anecdotes of a Swedish girl crossing the Atlantic, a silent environmental revolution has crossed the world, and possibly the one that will do the most to reduce carbon dioxide emissions, the costs of photovoltaic solar energy do not stop falling.

Until recently the reaction on solar energy was mixed, on the one hand it seemed wonderful that we could generate energy by simply putting a black panel in the sun, on the other hand the cost of the panel and storing such energy was so expensive that it seemed absurd put our euros there, there are much cheaper alternatives that depend on wind, hydrocarbons or uranium fission.

However, the cost of photovoltaic solar energy has been falling for years , becoming even cheaper than the average market price. This is happening in multiple geographies, not only in sunny Spain and California, but even in colder and cloudy countries.

The incredible waning cost

According to Lazard in a 2017 report, the cost of photovoltaic solar energy has not stopped falling in recent years, in the US we have gone from more than $ 350 per MWh in 1979 to $ 50 in 2017. This cost is below any other. Coal, traditionally the cheapest one, cost $ 102, nuclear costs $ 148, gas costs $ 60. Only the wind is below, with a cost per MWh of $ 45.

But this does not happen only in the US, but virtually anywhere in the world. In Helsinki (to give an example of an unsuitable place) for example the cost is € 42 MWh, when the cost of spot energy is 47 MWh. If we go to sunny Malaga the cost falls to € 24 MWh, when the usual cost is € 57 MWh.

But according to a report from the Polytechnic University of Madrid , which collects different costs and graphics, the cost is also decreasing in places like Japan, China or Germany. This cost reduction is noticeable in both residential roof panels and industrial facilities. The cost of solar energy does not stop decreasing.

Why this decrease in cost? Mainly to the decrease in the cost of manufacturing solar panels, increasingly cheaper especially since they are produced in China. But costs have been reduced, also in manufacturing in Europe and Japan.

The explosion of photovoltaic solar energy

When prices fall, it is usual to sell more, and this is happening spectacularly with solar panels. Between 2010 and 2016, 100 times more solar cells were produced than there were in the world before 2010. In addition, more and more solar panels are installed worldwide.

For example, in 2019 until July 31 of the same year, 1100 MW have been installed in Spain, the highest pace since 2008. This year the record could be broken. We also have that in Spain 1 of every 4 MW of new installed power is installed in Europe , that is, although there is more installed power in other countries, the greatest growth in installed power is in Spain.

But the growth of installed power also happens outside the peninsula , in 2017 53GW were installed in China, when the total installed power in Spain is 5.6GW. There is also a strong commitment to this technology in the US, India, Japan and Germany. Being the main economies of the world, they also have some of the highest energy consumption and it is normal that they want to take advantage of the energy they receive from the sun.

It remains to be seen if this trend will continue to grow in the coming years, it will be if costs continue to fall, perhaps the problem after solar energy is going to be the need to store all this energy produced for cloudy days and for daylight hours in which we have no sun. Meanwhile, it will be necessary to combine solar energy with other technologies such as nuclear or hydrocarbons.

Ask the readers , are we facing an explosion of solar energy or is this current just as it has come back?

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