Fuel bills worldwide saw significant relief in 2022, thanks to renewable energy, as indicated by a recent report from the International Renewable Energy Agency (IRENA). The report reveals that a remarkable 86% of renewable electricity now costs less than electricity generated from fossil fuels, with solar power emerging as the frontrunner in this green energy revolution.
IRENA’s latest report underscores the profound impact of renewable energy on global energy economics. A staggering 86%, equivalent to 187 GW, of energy capacity generated from recently commissioned renewable projects proved to be more economical than purchasing fossil fuel-generated electricity. This shift could herald a transformative change in the global energy landscape.
The report shines a spotlight on the pivotal role played by solar power in the renewable energy market. Over the period from 2010 to 2022, the global average cost of solar photovoltaic-generated electricity plummeted by an impressive 89%. In 2022 alone, despite facing rising material and equipment costs due to inflationary pressures, the cost of solar electricity dropped by 3%. As fossil fuel prices surged, the cost of solar power dipped to 29% below the price of the least expensive fossil fuel alternative.
The future for solar power appears exceedingly bright, with recent developments suggesting a seismic shift in the energy industry. Notably, investments in solar power are on track to surpass those in the oil sector in 2023, and solar power installations have set a new global record for the tenth consecutive year.
Francesco La Camera, Director-General of IRENA, believes this could mark a turning point for renewables in the global energy transition. He remarked, “Cost-competitiveness has never been greater despite the lingering commodity and equipment cost inflation around the world. The most affected regions by the historic price shock were remarkably resilient, in large part thanks to the massive increase of solar and wind in the last decade.”
However, challenges persist. While China played a pivotal role in driving down global solar and renewable energy costs, variations exist in different regions, with costs increasing in several major markets.
The stabilization of fossil fuel prices and continued investments in fossil fuels could bolster their competitiveness against solar and other renewables. Moreover, upward trends in the costs of materials and equipment for solar and renewables underscore the importance of sustained investments in grid infrastructure and energy storage solutions to fully harness the potential of renewable energy and drive down prices. Promoting innovation and ensuring equitable access to clean energy worldwide remain essential goals.
Lightsource BP, a key player in the renewable energy sector, is actively contributing to this transition by investing in solar infrastructure across 19 countries, including emerging markets like Brazil, Poland, and Taiwan. Their efforts include expanding battery storage capacity to store surplus electricity from their solar farms, thereby accelerating the global shift towards renewable energy.
Francesco La Camera emphasized the urgency of this transition, stating, “There is no time for a new energy system to evolve gradually as was the case for fossil fuels. In preparation of the COP28 in Dubai later this year, today’s report shows once again that with renewables, countries have the best climate solution at hand to raise ambition and take actions in a cost-competitive way.”