Solar Energy is the Cheapest Power Source

The Current Situation

Already in 2020 the International Energy Agency (IEA) stated in its Annual Report: Solar energy is the cheapest source of electricity! Cost for newly constructed generation capacity has dropped by 80% in the last decade, largely due to lower solar panel cost and increased system reliability.

Using CO₂-neutral energy is urgently needed, as climate-relevant emissions have increased by more than 63% since 1990. Electricity generation increased by 127% over the same period of time, adding a significant impact on CO₂ emissions.

Obviously therefore, electrification of road and rail transport must include less harmful electricity production. Fortunately, this conclusion is no longer controversial.

Coal-based power generation has declining internationally, despite Germany’s weak performance in the phase-out. However, usage of natural gas has been on the increase. Natural gas is better than coal, but it is far from good – it is a one-time resource on the planet after all. And not all gas is created equal: If gas is not merely burnt off during oil production but put to productive use, it is a benefit. If it is produced by fracking in Germany or North America we’re looking at a problem.

Where do we want to go from here?

Back to solar energy: It is already the cheapest source of electricity today. Nevertheless, the US Department of Energy (DOE) is investing more than a hundred million dollars to reduce the cost of  photovoltaics and solar thermal energy by 60% in the coming decade. The cost target is 2 US cents per kilowatt hour of solar energy by 2030.

The current cost level is 4.6 US cents per kWh. In comparison, the wholesale price in Germany averaged 3.1 Euro cents per kilowatt hour in 2020  (approximately 3.6 US cents). Germany apparently still has an edge there.

However, given the slow but expensive German coal exit, the de facto end to the expansion of wind energy on German mainland and the sluggish implementation of EU-mandated improvements for regenerative energy production, Germans cannot be satisfied. For example, as a contribution of a responsible administration, solar roofs and solar facades should be mandatory for all public buildings.

What can we do as individuals? First, pushing for expansion of solar power systems wherever possible, both in our private and professional lives. Second, you might want to drive an electric car, if you must drive at all. If so, charge it during the middle of the day, when solar power production exceeds demand.

And of course: Please spread the word!

This article was also published on LinkedIn.

You may also want to read: Photovoltaics are Contagious