Every few years, analysts come out of the woodwork to predict energy produced by solar panels will become cheaper than coal on a global scale.
This year, the research firm Bloomberg New Energy Finance (BNEF) predicts “solar may be cheaper than using coal on average globally” by 2025.
Solar prices have fallen 62 percent since 2009 and some countries, including Chile and the United Arab Emirates, have brokered a solar deal for “less than 3 cents a kilowatt-hour, half the average global cost of coal power,” BNEF reports.
“These are game-changing numbers, and it’s becoming normal in more and more markets,” Adnan Amin, International Renewable Energy Agency ’s director general, told BNEF. “Every time you double capacity, you reduce the price by 20 percent.”
But this is old news, apparently.
Bloomberg News published a similar article in 2008, citing a U.S. Department of Energy (DOE) report claiming “[c]osts for the technology will fall below coal as soon as 2020.” DOE predicted solar thermal costs “may fall as low as 3.5 cents a kilowatt hour by 2020.”
That prediction may have been a little premature. The Energy Department’s projection for the cost of electricity generation in 2022 has solar thermal pegged at 24 cents per kilowatt hour.
The Ivanpah solar thermal plant in southern California generates electricity at a cost of $200 per megawatt hour, or 20 cents per kilowatt hour. That’s nearly six times the cost of electricity from natural gas-fired power plants.
The Energy Department predicts generating electricity from photovoltaic solar panels in the U.S. will be around 8.5 cents per kilowatt hour by 2022. That’s before any subsidies.
The government doesn’t give an estimate for coal plants that don’t use costly carbon capture technology because of an Obama administration global warming regulation. Though a 2014 report put the cost of coal-fired electricity in 2019 at 9.6 cents per kilowatt hour.
But solar power won’t be competing against new coal so much as replacing existing coal plants, according to the free-market Institute for Energy Research (IER). The group found existing coal plants produce electricity at just under 4 cents per kilowatt hour — half the cost of solar in 2022.
Solar energy will likely get cheaper in the coming years, but even with that it’s not expected to generate a whole lot of electricity on a global scale.
ExxonMobil’s newest global energy outlook report projects wind and solar will only generate 4 percent of all the world’s energy by 2040. Coal will generate 20 percent of global energy.
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