The average cost of electricity generated by solar and wind energy could fall by up to 59 percent by 2025 if the right policies are in place, a report by the International Renewable Energy Agency (IRENA) said yesterday. Since 2009, solar photovoltaic (PV) module prices have fallen by 80 percent and wind turbine prices have fallen by around 30-40 percent as renewable energy capacity has grown to record levels and technologies have improved.

Solar and wind technologies can continue to fall in price to 2025 and beyond if governments set policies to minimise transaction costs and to streamline administrative procedures and approval processes, the report said. IRENA estimates the global weighted average levelised cost of electricity (LCOE) of solar PV could fall by 59 percent by 2025 from 2015; the LCOE of offshore wind could fall by 35 percent and the LCOE of onshore wind by 26 percent. The LCOE of concentrating solar power could also be as much as 43 percent lower by 2025.

The LCOE comprises the cost of generating a megawatt-hour (MWh) of electricity; the upfront capital and development cost; the cost of equity and debt finance and operating and maintenance fees.

"To continue driving the energy transition we must now shift policy focus to support areas that will result in even greater cost declines and thus maximise the tremendous economic opportunity at hand," said IRENA's director-general Adnan Z. Amin.