For over a century, the cheapest source of electricity was coal. In the last couple of decades, however, renewable energy sources have shown a staggering reduction in prices, driven by consistently improving technology and economies of scale. The crown for the cheapest renewable source, however, goes to solar energy in most locations.
Solar has been the hero of an ‘underdog to champion’ story. In less than 50 years, the prices of solar cells took an incredible dive, showing a 99% reduction. Not just that, the past decade alone witnessed a whopping 80% reduction in the pricing of panels. Thanks to this, solar power has triumphed as the cheapest renewable energy source in most places in the world.
How Cheap is Solar Power?
Solar today is at its cheapest, but to understand the massive change in solar power prices, we need to look at the price of solar equipment when the technology was in its infancy. Max Roser of Our World in Data does an excellent job of shedding light on this:
“At that time  the cost of just one watt of solar photovoltaic capacity was $1,865 (adjusted for inflation and in 2019 prices). One watt isn’t much. Today one single solar panel of the type homeowners put on their roofs produces around 320 watts of power. This means that at the price of 1956 one of today’s solar modules would cost $596,800.”
In comparison, the cost of solar panels today is less than a dollar per watt. This rate of change in price is almost unimaginable for any technology. But solar is not just cheaper than itself from a few decades ago – it overtook all of the fossil fuels, which were ridiculously cheap in comparison for quite long.
For instance, the IEA confirmed in its “World Energy Outlook 2020” report that solar is officially the cheapest energy source in most major countries. Interestingly, according to the 464-page report, solar electricity is some 20-50% cheaper today than the IEA had estimated in last year’s outlook. This builds on IRENA’s “Renewable Power Generation Costs in 2017” report which names solar and wind as the cheapest sources for power generation.
Why is Solar the Cheapest Renewable Energy?
As mentioned previously, at its onset, a single solar panel cost hundreds of thousands and could barely power a few lights, while fossil fuels were in abundance and literally dirt cheap. One would have said that solar was a technology fated to die out in a few years.
Surprisingly, solar survived, and thrived. The reason for this is that solar was the only technology that could power space applications, where the scarcity of oxygen and a serious logistics problem meant using coal would be nearly impossible. As more solar panels were manufactured, better ways to manufacture were invented, which, coupled with the dawn of mass production, slashed the prices.
Another aspect that makes solar cheap is its impressive simplicity of construction. Compared to a coal-fired power plant or even a hydroelectric plant, a solar power system uses simpler and relatively smaller components that are connected in a somewhat modular fashion.
This flexibility and simplicity make solar cheaper than most other power sources. On the other hand, fossil-based power plants not only cost massive amounts of money to build, but they also cost a lot to run, unlike renewables. For instance, according to IRENA, replacing the costliest 500 GW of coal with solar PV and onshore wind next year would cut power system costs by up to USD 23 billion every year.
The Role of Climate Crisis
The industrial revolution in the previous century led to enormous growth and prosperity worldwide, but it also brought with it the challenges of environmental degradation. In the past few decades, climate change has worsened and the pressure to shift away from polluting fossil fuels is constantly rising.
Along with improvements in technology and dropping costs, the climate crisis has played a major role in accelerating renewables. Francesco La Camera, the Director-General for IRENA, says “We have reached an important turning point in the energy transition. The case for new and much of the existing coal power generation, is both environmentally and economically unjustifiable”.
According to IRENA’s analysis, if we retire uneconomic coal plants, it will reduce emissions by a staggering 3 gigatons. As the awareness of the problem’s gravity increases, the adoption of solar increases, in turn increasing production and cutting costs further.
Is Solar Worth It?
The only question that is more important than “how cheap is solar?”, is “is solar worth it?” For most people contemplating going solar, what matters more than the relative cost, is whether it saves enough money over the lifetime.
Fortunately, solar does a marvelous job of justifying any size of investment. Thanks to an extensive lifespan and low maintenance, the cost of solar power systems is recovered in less than half or often a third of its lifespan, leaving the remaining two-thirds for pure savings.
And this is not just because of the decrease in costs of solar equipment, but also because of the constant rise in electricity costs. Nearly everywhere in the world, power costs are rising because of the increasing difficulty and expenses in maintaining and operating old and inefficient fossil power plants and grids.
A combination of these two factors, viz. Rapidly falling solar costs and steadily climbing conventional, grid power costs, makes going solar totally worth it, whether it is in Canada, or almost anywhere in the world.
Renewables have come a long way and improving technology has slashed their costs in the recent few decades, but no other technology has seen as striking a transformation as solar power. Today, solar is not only the cheapest power source, it is also the simplest, most flexible, and arguably the most reliable renewable energy.
Some experts speak of a “solar singularity”, wherein solar will become so cheap in the coming few decades that no other power source will stand a chance and the world will run on solar. We do not know if and when that will happen, but there seem to be undeniably strong chances of that.
But with the incredible financial case any solar power system makes, you do not need to wait for the singularity to arrive. If you install solar today, you still save a serious amount of money over 3 decades. If you go with the correct payment plan, you even start saving a significant amount of money from day 1!
All-in-all, there has never been a better time to go solar. All you need to ensure is to go with a reputed and reliable company such as Green Integrations, so you can have complete peace of mind through top-quality components, a highly experienced team, and unbeatable after-sales service!