The ideal future for us would be with the availability of cheaper renewable energy. Nowadays, coal power plants are thought to be cheaper than any other source of energy.
The World Economic Forum (WEF) begs to differ, releasing a report that states that solar energy is now cheaper than coal.
Solar and wind energy costs the same or cheaper than fossil fuel based energy in more than 30 countries according to WEF.
The prices for solar and wind based energy production continue to fall and will reach a point known as “grid-parity”. About two-thirds of all countries in the world will reach grid-parity within the next few years.
Grid-parity in simple words means that producing energy through alternative sources is cheaper than the purchasing power of the electricity grid.
Michael Drexler, Senior Director and Head of Investor Industries at WEF, said in a statement,
Renewable energy has reached a tipping point. It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.
US Leading The Pack
In US, Solar energy has already become the biggest source of electricity production. In 2016 alone they added 9.5 Gigawatts of solar cells to the national grid.
The rest of the world, however, is not doing so well. Other countries have not reached similar levels of renewable energy production to avoid potentially dangerous affect of global warming, according to the UN.
The Paris climate change accord set the target of renewable energy investment at $1 trillion. Last year’s global investment in renewable energy was just 25% of that target at $286 billion.
Solar Will Cost Half as Much as Coal in 10-20 Years
Prices are ultimately going to fall well below the levels of coal and gas based energy. Solar energy based electricity in particular is going to cost half as much as coal or gas based electricity in 10-20 years. Some countries have already reached that price point.
In August, Solarpack, an energy company was contracted to sell electricity in Chile, South America at just $29.1 per Megawatt hour. This is 58% less than a natural gas based power plant in the country.