In the age of COVID, solar power prices are falling
Solar panel prices
Solar panel prices are declining in the United States and across the world, with far-reaching consequences for humanity’s transition from the hydrocarbon to the electrification age. Renewables will triumph if they become economically competitive with fossil and nuclear energy, as I have consistently advocated in these pages.
Unit costs averaged 0 0.21 per watt in the first quarter of 2020, compared to Amirica 0.63 per watt in the first quarter of 2016. The Solar panel price over all solar system has been reduced in all markets, including residential and non-residential establishments. The drop was primarily due to lower hardware prices, higher availability of units due to increasing Chinese production, and the shutdown-induced drop in global energy consumption. Even in the face of tariffs on Chinese solar panel imports, these factors cooperated to decrease Solar panel prics.
The drop in solar pricing is not confined to the United States: renewable energy systems throughout the world appear to be becoming less expensive and increasing quicker than previously.
The drop in solar pricing is not confined to the United States: renewable energy systems appear to be getting cheaper and expanding faster than traditional energy sources across the world during the last year. Solar and wind energy accounted for 67 percent of new energy capacity installed in 2019, according to Bloomberg New Energy Finance (BNEF), while fossil fuels accounted for 25 percent.
Furthermore, solar’s uniform cost of electricity (LCOE) – or the cost of producing energy with all inputs and costs – is now low enough to put traditional thermal plants in jeopardy. China’s introduction of extremely efficient monocrystalline solar modules last year reduced the domestic solar LCOE to $3.40 per megawatt-hour (MWh), bringing it on level with the cost of newly constructed coal-fired power plants. The ramifications are tremendous.
Over the last six months, the cost of solar energy from big projects in Australia and Chile has ranged between $235 and $31 USD per MWh. PV Magazine reports that:
Following current trends, wind and solar power plants in this class will have LCOEs of less than $20 per megawatt hour by the year 2030. Today, the greatest solar energy projects in Chile, the Middle East, and China, as well as wind power projects in Brazil, the United States, and India, may reach less than $31 per MWh. There are several technologies in the works that will further cut expenses.
Global solar PV capacity is anticipated to grow over the next decade, with an estimated 2.72 trillion invested through 2030.
Solar panel price has fallen
It was around three and a half dollars per watt when rooftop solar panels were first introduced 14 years ago. Asia-Europe clean energy consultant AECEA predicts that solar system prices will continue to drop in the next quarter and unit costs would decline by 10 percent in 2020. Since 2006, the solar panel price has fallen by nine times. By 2040, analysts predict that prices will plummet to less than $0.20 per watt.
China, the world’s largest solar panel manufacturer, has seen a significant increase in production capacity and efficiency. Comparing the first three months of this year to the same period last year, China’s modular production capacity increased by 17 percent. To expand their market share in the world’s hottest market, leading solar manufacturers in China announced intentions earlier this year to raise their solar manufacturing capacity by around 18 gigawates (GW).
Solar workers are expected to lose their jobs
More than 72,000 solar workers are expected to lose their jobs, and solar PV capabilities and additions in 2020 are expected to decrease by 30 percent. In the United States, the solar market is expected to grow at a compound annual growth rate (CAGR) of 17.32 percent over the period 2020-2025, despite covid’s massive layoffs: This sector’s ongoing expansion, according to a new market analysis, may be attributed to the following:
It is possible that in 2021, the tax benefits for renewable energy sources may expire, thus solar investors will be rushing to complete their projects in 2020 and 2021. Due to this, COVID-19 is projected to have a partly positive impact on solar sector investments
U.S. producers became more competitive due to a 30 percent tax on solar panel imports.
A combination of the expiring tax incentives and reduced solar panel costs will make the U.S. solar industry viable through 2025.
Due to an increased supply of solar energy units, technological advances and efficiency gains, stagnating energy demand, and the expansion of green legislation, solar energy adoption is now on the rise in comparison to traditional energy sources. Solar energy will continue to replace existing primary load power sources as long as cost-effective energy storage technology is developed and delivered to compensate for the disruption.
It appears that global solar is in a good position to weather the covid hurricane.
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