Renewable energy sources such as hydroelectric power, wind power, and concentrated solar panel energy are continuing to decrease in price. The good news was contained in the newest Renewable Power Generation Costs report released by the Abu Dhabi-based International Renewable Energy Agency (IRENA). IRENA also predicted in their report that renewable energy sources will be cheaper than fossil fuels by the year 2020, which is fantastic news for not only the renewable energy industry, but the world in general!
Hydroelectric power is the cheapest source of renewable energy at an average cost of $0.05 per kilowatt hour (kWh). Not far behind are solar and geothermal energy, which cost an average of $.10/kWh. Finally, wind power is the most expensive of renewable energy sources, which costs an average of $0.13/kWh. It is important to understand that these statistics are based on global information and individual projects pertaining to renewable energy can range from $0.05/kWh to $0.25/kWh. This is still great news as to compare these prices with that of fossil fuels, which range from $0.05/kWh to $0.15/kWh, the price difference is minuscule.
What Cause the Price Reductions?
The cost reductions in renewable energy have come about because the price to build and run new renewable energy plants has decreased. The global weighted-average cost for renewable energies are as follows: bioenergy electricity fell by 14%, solar PV and wind fell by 13%, hydropower fell by 11%, and most significantly, concentrated solar panels (CSP) fell by 26%. As the total cost to operate the plants continues to decrease, incremental but noticeable decreases in per kilowatt hour prices for renewable energies will continue to decrease as well.
Benefit to Society
Up until this point, the main topic of this article has been focused on the numbers and how renewable energies are now able to compete with fossil fuel prices. But, there is a greater benefit to mention. With diminishing usage of fossil fuels and increased usage of renewable energy, our environment will benefit and pollution will begin to slow down. Renewable energy will never run out, while fossil fuels have a limited supply. The sustainability of renewable energy creates optimism that the climate objectives in the Paris Agreement can be met–now it’s just a matter of making sure we can accelerate the growth of renewables.
If you are interested in joining the movement towards renewable energy, contact the team at Intersect Energy today! We provide analysis, financing, and structuring of alternative energy solutions for your site with a goal of reducing the site’s environmental impact while maximizing savings for you as the site owner. Contact us today to get started on your next renewable energy project. Make sure you keep up with the latest news in the world of renewable energy by following us on LinkedIn!