The dramatic cost reductions we’ve seen in recent years for solar and wind electricity will continue well into the future, according to a new report released today by IRENA. It finds that by 2025 – with the right regulatory and policy frameworks in place – average electricity costs could decrease 59% for solar photovoltaics (PV), 35% for offshore wind, 26% for onshore wind, and up to 43% for concentrated solar power compared to 2015.
IRENA’s Director-General Adnan Z. Amin commented that “We have already seen dramatic cost decreases in solar and wind in recent years and this report shows that prices will continue to drop. Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables.”
Since 2009, prices for solar PV modules and wind turbines have fallen 80% and 30-40% respectively. With every doubling of cumulative installed capacity, solar PV module prices drop 20% and the cost of electricity from wind farms drops 12%, due to economies of scale and technology improvements.