A report by auditing and consulting firm EY shows that despite inflationary pressures, solar energy remains the cheapest source of electricity for new construction. The global weighted average cost of electricity (LCOE) for PV is now 29% lower than the cheapest fossil fuel alternative.
According to the international magazine pv.
Audit and consultancy EY said in its latest energy and resources report that 86% or 187 GW of newly commissioned renewables will produce electricity at a lower cost than the average cost of fossil energy generation in 2022.
According to EY, solar energy is already the cheapest source of electricity in many markets, even after accounting for inflation and price increases. But the weighted average levelized cost of energy (LCOE) kWh of solar power is now 29% lower than the cheapest fossil fuel alternative. Large-scale energy storage is also becoming more competitive and sophisticated, according to the report.
Overall, the average LCOE for solar has fallen rapidly worldwide, from over $400/MWh in early 2010 to around $49/MWh in 2022, a drop of 88%. In comparison, the LCOE of wind power has decreased by approximately 60% over the same period.
EY forecasts suggest that solar and wind power will become the world’s largest sources of electricity by 2030, when they are expected to account for 38% of all electricity. According to EY, China, Europe and the United States will be responsible for 53% of the increase in solar and wind generation, accounting for more than 57% of global solar and wind generation by 2050.
“Global solar development will generate more than half of this electricity, but its integration will vary from market to market. Solar power will become a major source of energy in countries such as the United States, Oceania and South Asia, thanks to rapid advances in solar PV panel technologies,” EY said.
However, these milestones will not be achieved without removing major barriers to progress, says EY. In the United States in particular, the backlog of interconnection requests is causing delays, cancellations, and high costs. According to EY, the United States has at least 1,350 GW of wind and solar capacity waiting to be connected and 680 GW of storage capacity, enough to double the world’s electricity supply.
In a survey of more than 70,000 consumers worldwide, EY found that acceptance of solar energy for the home is strong. About 62% of respondents said they have purchased or are considering purchasing solar panels, while 50% are considering purchasing or have already purchased battery storage.
Translated by Marie Beyer.
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