The average costs for electricity generated by solar and wind technologies may fall by between 26% and 59% by 2025, according to a report released by the International Renewable Energy Agency (IRENA).
The report named “The Power to Change: Solar and Wind Cost Reduction Potential to 2025,” elaborates that with the right regulatory and policy frameworks in place, solar and wind technologies can continue to realize cost reductions to 2025 and beyond.
Report explains that by 2025, average electricity costs could decrease 59 per cent for solar photovoltaics (PV), 35 per cent for offshore wind, and 26 per cent for onshore wind compared to 2015.
“We have already seen dramatic cost decreases in solar and wind in recent years, and this report shows that prices will continue to drop, thanks to different technology and market drivers,” said IRENA Director-General Adnan Z. Amin. “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 roughly 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, according to IRENA.