Solar to become cheapest fuel: report

web solarSOLAR energy will become the cheapest energy source for the sunniest parts of the world in the next 10 years, according to a report commissioned by independent German researcher, Agora Energiewende.

The think tank wanted to see if recent falls in the cost of photovoltaics would continue, and found there was “no end to the cost decline”.

“The technology still has further improvements so we expect that within the next 10 years photovoltaics will become, in many regions of the world, the cheapest source of electricity,” Agora Energiewende director Dr Patrick Graichen said.

Agora Energiewende predicted solar power from new plants would cost between 1.6 cents per kilowatt hour and 4.9c/kWh by 2050.

The renewable energy costs 80 per cent less in Germany today than it did 10 years ago and continues to fall.

“Plans for future power supply systems should therefore be revised worldwide,” Dr Graichen said.

“Until now, most of them only anticipate a small share of solar power in the mix.

“In view of the extremely favourable costs, solar power will on the contrary play a prominent role, together with wind energy – also, and most importantly, as a cheap way of contributing to international climate protection.”

By 2025 it was predicted the cost of producing solar power in central and southern Europe would fall to between 4 and 6c/kWh and as low as 2 to 4c/kWh by 2050, according to a study by the Fraunhofer Institute for Solar Energy Systems.

The study also found that electricity generation costs for solar power were dependent on financial and regulatory frameworks, as poor regulation and high risk premiums can bring the cost of plants up by 50 per cent.

Australia has the highest average solar radiation per square metre of any continent in the world and more than 2 million households have solar hot water systems or solar photovoltaic systems on their rooftops, according to the Australian Renewable Energy Agency.