Within a few years time, according to a new report by energy experts, solar energy is expected to be more affordable than fossil-fuels. GlobalData. As a result the sector is expected to lower it’s average retail prices in the future, fostering growth in the renewable energy sector.
The research shows that the global cumulative installed solar PV
capacity has increased by 100% between 2009 and 2011. It is expected that this percentage will keep on growing since China and the United States are searching for ways to reduce costs and increase the efficiency of the panels.
In the US, solar PV technology is expected to reach grid parity for
some PV projects in 2014, and by 2017 most regions in the country are expected to reach grid parity in alignment with average electricity prices in the residential sector. China is also due to witness similar developments, with grid parity for solar expected to reach in most regions by 2015-2016. Spain and California, have already achieved grid parity on the price of solar, but only for large installations rather than small-scale ones for homeowners.
From 2017 onwards, solar energy will be the most affordable form of
power, according to the report. Also, the cost of fossil fuels will
continue to rise. Last years British Gas announced 18% and 16% rises to it’s gas and electricity prices, just eight months after it raised prices by 7%.
Consultancy giant McKinsey &Company brought out their latest research on solar energy in April, predicting solar power will be cost competitive with fossil fuels in hot countries within two to three years. According to them, further cost reductions will be delivered as a result of classic industrialisation levers, not because of any major technological breakthroughs. The company explained that cost reductions would be possible due to improvements in manufacturing processes, more sophisticated procurement and greater efficiency in the supply chain. These factors explain a 75% drop of prices over the the last 7 years.
Solar energy accounts for 14% of the world’s alternative energy capacity, making it one of the largest forms of sustainable power. It is considered to be the fastest growing renewable energy source currently available.