Recent research reveals that the cost of solar power has experienced a staggering reduction of nearly 90% over the past decade, a trend that brings it closer to a crucial threshold rendering fossil fuel-based power economically unviable.
A study conducted by the Berlin-based Mercator Research Institute on Global Commons and Climate Change (MCC) demonstrates that the price of electricity generated by solar panels has plunged by a remarkable 87% since 2013. This steep decline underscores that the shift toward renewable energy sources has become “more cost-effective than initially projected.”
Moreover, the decreasing costs associated with batteries and other renewable technologies have the potential to significantly accelerate the adoption of cleaner energy and the attainment of climate objectives.
Felix Creutzig, who spearheaded the research, states that certain calculations even suggest that by 2050, the entirety of the world’s energy demand could be met comprehensively and economically through solar technology and other renewables. Although this scenario is notably optimistic, it underscores the importance of aligning climate science and policy with ongoing technological advancements.
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This research release coincides with recent analyses indicating that battery costs have dropped by nearly 10% in the past month. According to the energy analytics firm Benchmark Mineral Intelligence, this decrease has brought battery prices below the critical threshold of $100 per kilowatt-hour (kWh) in August, marking a tipping point that places electric vehicles (EVs) on par with fossil fuel-powered vehicles in terms of price.
In addition to expediting the transition to EVs, the decline in battery prices also bolsters renewable energy technologies like solar and wind installations, as these technologies rely on batteries to store surplus energy during periods of excess production.
The reduction in costs for renewable technologies is attributed to scientific advancements that enhance their efficiency and a decrease in raw material expenses.
Jan Minx, the head of the MCC Applied Sustainability Science working group and one of the leaders of this latest research, emphasises the significance of technological progress in the context of escalating greenhouse gas emissions. He believes that new scenario models, currently under exploration, will likely demonstrate that the global transition toward addressing climate change might not be as costly as previously assumed and may even result in cost savings, provided it is addressed with determination.