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A report from Ernst & Young (EY) shows that, despite inflationary pressures, solar energy remains the cheapest source of new construction electricity. The global weighted average levelized cost of electricity (LCOE) of PV is now 29% lower than the cheapest fossil fuel alternative.
EY said in its latest energy and resources report that 86%, or 187 GW, of newly commissioned renewable energy resources generated electricity at a cost below the average cost of fossil fuel generation in 2022.
Solar is the cheapest new build electricity in many markets, even amid inflation and price rises, EY said, noting that the global weighted average LCOE for solar is now 29% lower than the Cheaper fossil fuel alternative. Large-scale energy storage is also becoming increasingly competitive and sophisticated.
The average LCOE for solar has fallen rapidly worldwide, from more than $400/MWh in the early 2010s to around $49/MWh in 2022, down 88%. The LCOE of wind energy has fallen by approximately 60% in the same period.
According to EY forecasts, solar and wind energy will become the worlds sources of baseload electricity. By 2030, the two traditional renewable energies are expected to represent 38% of the energy mix, and by 2050 solar and wind could supply 62% of the energy mix. China, Europe and the United States will drive a 53% increase in solar and wind generation, producing more than 57% of global solar and wind production in 2050, according to EY.
“The global solar energy boom will drive more than half of this figure, but adoption will vary across markets. “Solar energy will become the largest source of energy in countries such as the US, Oceania and South Asia, driven by the rapid advancement of technologies around photovoltaic modules,” says EY.
However, these milestones will not be achieved without removing significant obstacles to progress, according to EY. Especially in the United States, the accumulation of requests for grid interconnection is causing delays, cancellations and high costs. EY noted that the United States has at least 1,350 GW of wind and solar capacity and 680 GW of storage waiting to be connected, enough to double the countrys electricity supply.
In a survey of more than 70,000 consumers around the world, EY found that sentiment toward residential solar adoption is strong. About 62% of respondents say they have purchased or are thinking about purchasing solar panels, while 50% are considering purchasing or have already purchased storage batteries. |
