Solar power is now “cheapest electricity in history”, says IEA

The International Energy Agency has declared solar power to be “the cheapest electricity in history,” in the newly released 2020 version of its annual World Energy Outlook.

The WEO2020 – which also includes, for the first time, a scenario that is broadly consistent with Paris climate targets – puts the cost of capital of wind and solar as low as 2.6% in Europe and the US, and far below its previously assumed range of 7-8%.This means solar can now be produced “at or below” $US20 a megawatt hour, as has been delivered in auctions in Portugal ($US13/MWh) and the Middle East, and is now so cheap that “for projects with low-cost financing that tap high-quality resources, solar PV is now the cheapest source of electricity in history.”

Renewables form a large part of the changes required to meet whatever scenario that the IEA is contemplating, with solar – dubbed by the IEA as the new “king of electricity” – expected to produce 43 per cent more, even in the central scenario.

That translates into record-breaking additions of new solar capacity in every year from 2020, and contrasts with the IEA’s previous assumptions that solar additions would flatline into the future.