Solar energy has finally hit a tipping point where it’s cheaper to invest in solar power generation than coal power. Coal has been considered the least expensive option for power generation for many years. In 2009, it was 223% more expensive to build a new solar farm than a new coal plant. But now that equation has changed. Today electricity from a coal plant is 177% more expensive than solar panels. The price of solar electricity has dropped 89% in ten years, from $359 to $40 per megawatt-hour.
Source: Our World in Data
There are several reasons for this trend including technology breakthroughs that make solar more efficient and reliable, and an increase in capacity which also brings the cost down.
The International Energy Agency (IEA) says that solar power is now the “cheapest electricity in history” in its World Energy Outlook 2020 report and the economics will accelerate its adoption over the next decade.
A Carbon Tracker report found that it’s cheaper to invest in renewables than coal in energy markets around the world. The United States, Europe, and China are all making strides in a transition to renewable energy. Solar power is likely to become China’s third-largest electricity source by year-end, according to the National Energy Administration (NEA). While coal still leads power generation in China, solar is increasing due to the lower costs and higher efficiency. Solar power is considerably cheaper in China ($20-40/MWh) than in the US or Europe ($30-60/MWh) because the Chinese government works to accelerate its growth.
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