Solar photovoltaics are much closer to competitiveness with conventional electricity generation sources than policymakers realise, according to Bloomberg New Energy Finance.
A working paper out last week, Reconsidering the Economics of Photovoltaic Power, argues that common perceptions about the lack of competitiveness of solar photovoltaic power are “misleading and out-of-date”.
The analysis by ten experts from Bloomberg, the United Nations Industrial Development Organization, the University of New South Wales and the International Renewable Energy Agency among other finds that average solar module prices have fallen by nearly 75% over the last three years.
The dramatic price reduction has made the power source competitive daytime retail power prices in a number of countries and should have major implications for policymakers and investors.
But many decision-makers have not caught up with the improved economics of solar photovoltaics, says the report, especially when it comes to technology choices and the design of tariff and other support mechanisms.
“Despite these highly attractive benefits and proven technical feasibility, the high costs of PV in comparison with other electricity generation options have until now prevented widespread commercial deployment,” the authors write.
“Now, with rapid cost reductions, a changing electricity industry context with regard to energy security and climate change concerns, increasing costs for some generation alternatives and a growing appreciation of the appropriate comparative metrics, PV’s competitiveness is changing rapidly.”
The report argues that the price reduction in solar modules is sustainable in the longer term and not just a product of recent overproduction.
The paper also contends that the metrics generally used to benchmark solar power against alternative generating technologies are often inadequate and may introduce bias against it.
For further information:
European solar power installations soar in 2011 (14-May)
Leading solar companies join force to expand deployment (4-May)
Greece makes start on becoming Europe’s solar ‘powerhouse’ (20-Apr)
Kyocera to build largest commercial-scale solar plant in Japan (11-Apr)
23 May 2012