(Credit: Costfoto/Barcroft Media via Getty Images)Barcroft Media via Getty Images
THE EDGE — SIMON FLOWERS
Solar is king of the low-carbon technologies. Its new-found competitiveness makes solar central to decarbonising power markets and, in time, it can fuel green hydrogen’s push into hard-to-abate sectors. I chatted to Ravi Manghani, Wood Mackenzie Head of Solar, who forecasts in Horizons that solar costs will continue to fall.
What’s driving the growth in solar? It’s economics rather than just the environmental agenda – solar is now competitive. Solar costs have fallen by 90% this century, most of that in the last decade. Nearly all capacity installed until now has been supported by feed-in tariffs and power purchase agreements subsidised by governments, in many cases, to get renewables off the ground. The guarantees attracted the capital, which delivered the scaling up. That’s all led to a steep reduction in costs.
We’ve reached the point in 2021 where, without subsidies, solar is cheaper than any other technology in 16 US states and some markets elsewhere in the world. Solar will dominate new power capacity as the world electrifies with as much as 8,000 GW added by 2050 in our AET-2 scenario – twice as much as wind (AET-2 is WoodMac’s 2 °C energy transition scenario).
Can costs fall further? We think we’ll see another 15% to 25% reduction over the next 10 years from a host of technology innovations. Two stand out. Bi-facial modules, which allow electricity generation on both sides of the panel, could lead to efficiency gains of up to 15%; and increasing wafer size on the module from the 158 mm in use today to 210 mm could double the power rating.