According to a recent report by the International Renewable Energy Agency (Irena), we have seen dramatic falls in the costs of renewable energy over the last ten years. Since 2010, the costs for solar PV have dropped by 82%, compared to a 39% reduction for onshore wind and 29% for offshore wind.
The figures were compiled from the costs and tariffs reported for 17,000 renewable energy project tenders last year, which should eventually add up to 1.7GW of clean power generation capacity.
And in comparison to the cost of fossil fuels, we can see that the tables are turning with more than half of the renewable capacity added in 2019 achieving lower electricity costs than coal. With renewable costs continuing to fall, this development is seen as a low-cost climate and de-carbonisation solution, which aligns short term economic needs in the wake of the COVID-19 pandemic with medium and longer term sustainable development goals. To put things in perspective, “New projects to produce energy from renewable sources are less and less expensive today compared to existing coal-fired power plants. On average, it’s cheaper to commission new PV and wind power facilities than to keep many coal-fired plants in operation.”
Read the full report here.
What has caused the dramatic cost reduction?
According to IRENA, the cost reductions witnessed in the last decade were due to improved technology, economies of scale, supply chain competitiveness and the growing experience of developers.
“The same amount of money invested in renewable energy is producing far more new capacity today than it was ten years ago,”
At Caplor Energy, we have experienced these changes first hand. The first system that Caplor installed was 10KwH, which cost £37,000. Now, a 10KwH solar PV system will only cost around £12k, showing just how much the cost of renewable energy has reduced massively over the last 10 years – largely due to a huge reduction in equipment costs with a global supply chain and international engagement with renewables (particularly solar). Companies that were not even involved in this industry just a few years ago are now producing world beating panels.
Renewables didn’t really exist in its current form 10 years ago and it’s already moved on so fast, but the product and industry lifecycle will continue at even greater pace over the next ten years as more consumers and industries address their environmental responsibilities. Technology and expectations are moving so fast, it is impossible to be an expert in every area, so collaboration feels like the key to success in this industry now, with businesses specialising in specific areas of expertise.
Is it possible to sustain this pace of growth?
From an industry that didn’t even really exist 10 years ago, it has now grown at such a pace that renewable energy is fundamental in all walks of life (over 30% of supply in the UK 2018) – with this growth set to continue against the backdrop of climate change and social responsibility, who knows where we will be in another 10 or 20 years’ time – maybe we will be living in a completely renewable world – here’s hoping…
If you would like to find out more about renewable energy solutions and benefit from these cost reductions for your home or business, get in touch with our friendly and knowledgeable team at Caplor who will be happy to discuss your options.