With the costs of creating electricity from solar power and wind continuing to fall, electricity from renewable energy will soon be "consistently cheaper" than electricity from fossil fuels, according to the head of the world's renewable energy agency.
By 2020, most wind and solar power technology now being commercially used will be priced in the same range as fossil fuels, "with most at the lower end or even undercutting fossil fuels", said Adnan Amin, the director general of the International Renewable Energy Agency (IRENA).
That is particularly good news for communities in parts of Africa, Asia and other parts of the world that remain unconnected to power grids and without access to modern energy, experts said. Cheaper prices for improved technology, combined with new financial arrangements to help put it in place, should lead to more unconnected communities getting access to clean power, according to energy access body Power for All.
Decentralized solar systems, including mini-grids and home systems, are expected to serve up to 100 million households by the year 2020, he said. Rwanda, for example is taking advantage of dropping costs to outfit 500,000 homes with solar systems, which should enable nearly 2 million people to access clean electricity before the end of 2019, said James Musoni, Rwanda's minister for infrastructure, including electricity.
The cost of producing renewable energy has fallen consistently since 2010, with wind and solar panels leading the way - and in some cases falling in price by as much as 73 percent over that period, according to a new report by IRENA. The biggest price drops have come in the cost of generating utility-scale power from solar panels, which means that such energy can now be added at a much more competitive cost, Amin said. In 2016 alone, he said, more than 160 gigawatts of renewable energy capacity was added to the world energy mix, or a nearly 9 percent increase. Around 70 percent of that increase came in developing countries, with Asia account for 58 percent and Africa 12 percent, he said.
Technological advances, competitive procurement, and a large base of experienced, internationally active project developers were the main drivers of the lower costs, Amin said. The agency said its 2017 review of the industry showed the renewable energy sector supported 9.8 million jobs globally, with solar voltaic systems the largest employer with 3 million jobs worldwide. That was a 12 percent increase from the agency's 2016 review, it said.