Solar set to be cheapest power source by 2030, Wood Mackenzie says

Global energy expert Wood Mackenzie has predicted that solar will become the cheapest source of new power by 2030 in a range of markets, including the US, Canada and China.

In its latest research paper titled Total eclipse: How falling costs will secure solar’s dominance in power, Wood Mackenzie said the industry is ‘highly investible’ due to its growing ability to meet both economic and policy goals.

The cost of solar power has dropped 90% over the last two decades and will likely fall another 15% to 25% in the decade to come, said the analyst. Solar is already the cheapest form of new electricity generation in 16 US states, plus Spain, Italy and India.

Wood Mackenzie research director Ravi Manghani said: “As the world strives to recover from the economic slump caused by the COVID-19 pandemic and simultaneously meet the climate and environmental goals of the Paris Agreement, solar is uniquely placed to advance efforts towards a low-carbon, sustainable future.”

During a pandemic-dominated 2020, global solar installations exceeded 115GW, compared to 1.5GW in 2006. While growth to this scale has been partially driven by government subsidies and environmental goals, solar generation is now attractive based on price alone.

“Solar is becoming so competitive that not only is it a means of decarbonisation for corporate buyers, but also a way to lower the cost of energy for their businesses,” Manghani added.

In the next decade, Wood Mackenzie expects further cost reduction to be propelled by growth and development in several technologies, including bifacial panels and sun trackers.