Sylvie Willis
Solar energy is now the cheapest form of electricity in history, according to the International Energy Agency's World Energy Outlook 2020. This report outlines the uncertain future of global energy use over the next two decades, with four pathways to 2040, all of which see a major rise in renewables. However, despite solar energy being cheaper to produce than fossil fuels, fossil fuels are still the predominant resources powering the global economy. This is due to a variety of factors, including the intermittent nature of solar power, the high upfront cost of renewable energy, and the continued subsidization of fossil fuels by governments.
| Characteristics | Values |
|---|---|
| Cost of solar energy | $38 to $78 per MWh |
| Cost of fossil fuels | $24 to $39 per MWh for existing gas plants; $48 to $109 per MWh for new combined-cycle natural gas plants; $31 to $114 per MWh for existing coal plants; $71 to $173 per MWh for new coal plants |
| Levelized cost of electricity (LCOE) for solar | $36.27 for solar and battery hybrid facilities; $71 per MWh for solar-plus-storage in the mid-Atlantic |
| Levelized cost of electricity (LCOE) for fossil fuels | $48 to $109 per MWh for combined-cycle natural gas plants |
| Environmental impact | Solar power is a more optimal resource than fossil fuels |
| Reliability | Fossil fuels offer near-constant availability; solar power is intermittent and requires grid storage |
| Operating costs | Operating costs of producing solar energy are lower than those of producing fossil fuels |
| Installation costs | Solar is easily installed on rooftops or ground mounts; fossil fuel use requires the degradation of the earth |
| Storage costs | Storage costs for renewable energy are falling but are still expensive relative to other options |
| Transmission costs | Transmission costs for renewables may be higher than for fossil fuel plants located closer to customers |
| Government subsidies | The G20 countries spend $452 billion per year subsidizing fossil fuels, making it difficult to compare the costs of solar energy and fossil fuels |
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What You'll Learn
Solar is the cheapest electricity in history
Solar energy is now the cheapest electricity in history. According to the International Energy Agency's World Energy Outlook in 2020, solar power is 20-50% cheaper than previously thought. This means that solar energy is cheaper than coal and gas in most major countries. The cost of solar energy has been revised downwards due to updated assumptions and an improving policy landscape.
Solar energy has quickly caught up with its non-renewable counterparts in terms of cost. The operating costs of producing solar energy are significantly lower than those of producing fossil fuels. Solar is easily installed on rooftops or ground mounts, harnessing an already-available resource: sunlight. In contrast, fossil fuel production requires the degradation of the earth and is a scarce resource that will eventually run out.
However, it is important to note that comparing the costs of various energy sources is complex. Government subsidies play a significant role in shaping the growth potential of different power sources, making direct comparisons challenging. Additionally, renewable energy sources like solar are intermittent and require grid storage solutions, which can be expensive.
Despite these considerations, solar energy remains competitive with power from gas and coal, even without subsidies. The cost of battery storage for renewable energy has decreased significantly, and renewable energy sources are expected to surge over the next two decades. As a result, solar energy is now the cheapest electricity available.
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Solar vs fossil fuels: environmental impact
Solar power is a clean and sustainable energy source with a virtually infinite supply. It is created by harnessing the sun's radiant radiation and has gained popularity as a cleaner, more environmentally friendly alternative to fossil fuels. On the other hand, fossil fuels, which have been the primary energy source for millennia, have been criticised for their detrimental environmental impact.
Solar energy significantly reduces smog production, acid rain, and the release of hazardous chemicals into the atmosphere. It also requires minimal water for operation, in contrast to fossil fuel power plants, which need large volumes of water for cooling and other processes. This high water consumption puts pressure on water resources, damages aquatic ecosystems, and exacerbates scarcity in water-scarce regions. Solar energy's low water footprint helps conserve water resources and reduce the strain on ecosystems.
Solar energy systems can be installed on various surfaces, such as parking lots, roofs, and vacant land, without extensive digging or land clearing. This minimal land disturbance results in less disruption to ecosystems and natural habitats. Additionally, solar energy production does not produce air pollution, water pollution, or resource depletion, all of which are associated with fossil fuel use. Fossil fuels are non-renewable resources that deplete finite reserves, whereas solar energy is renewable and sustainable.
The burning of fossil fuels releases greenhouse gases, contributing significantly to global warming and climate change. According to the World Health Organization (WHO), approximately 99% of people worldwide breathe air that exceeds safe air quality limits, and over 13 million deaths annually are attributed to avoidable environmental factors, including air pollution. In 2018, air pollution from fossil fuels resulted in $2.9 trillion in health and economic costs, approximately $8 billion per day. Transitioning to clean energy sources like solar power is crucial for addressing climate change, reducing air pollution, and improving public health.
While solar power has environmental advantages, it is important to acknowledge the challenges associated with transitioning to renewable energy sources. For instance, solar and wind power costs are expected to remain higher in 2022 and 2023 compared to pre-pandemic levels due to increased commodity and freight prices. However, the competitiveness of renewable energy sources improves due to the sharper increases in gas and coal prices. Additionally, government subsidies play a significant role in shaping the growth of new power sources, making direct cost comparisons between solar energy and fossil fuels complex.
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Solar is easily installed
Solar energy is easily installed on a rooftop surface or ground mount, harnessing an already-available resource: sunlight. In contrast, fossil fuel use requires the degradation of the earth as a means to fuel production. Solar panels can be installed at any time of the year, but for areas with frequent snowfall, it is recommended to install them after the snow has cleared.
Solar installations involve multiple steps, from initial consultations and system design to generating electricity. Each step takes time, and with increased demand expected, timelines may stretch even longer than the typical two to three months. Before purchasing anything, it is important to evaluate your energy needs, decide if your home is suitable for solar, explore incentives near you, compare quotes from qualified installers, and choose how to pay for solar before signing a contract.
There are also various permits and paperwork requirements for solar panel installation. Local building permits are required, and you must identify the Authority-Having Jurisdiction (AHJ) for each project. Planning a solar installation has become easier with the development of remote planning software, which can estimate a proposed location's solar output and generate complete solar designs and sales proposals with just an address and an electric bill.
While solar panels can be installed as a DIY project, it is recommended to consult a solar energy specialist or contractor due to the high-voltage electricity, structural integrity, legal requirements, and inspections involved. Certification is not mandatory for installers, but it provides valuable training and knowledge for planning and installation, promotes customer confidence, and may allow for operation in multiple states or municipalities.
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Fossil fuels are reliable
Fossil fuels have been the predominant energy source for decades, and our infrastructure has been developed around them. This means we can use them effectively, and they are relatively cheap. Fossil fuels are easily transported through international gas pipeline systems or tankers, and can be stored for an indefinite period, which is beneficial for preparing for high-demand periods such as winter.
The world currently relies on fossil fuels to meet its tremendous energy demands. Globally, fossil fuels provide about 80-87% of the world's energy needs, with 67% of US power generation depending on them. They are used across various sectors, including agriculture, healthcare, transportation, and technology. Fossil fuels provide the electricity needed to power medical equipment, high-tech devices, and industrial processes.
While fossil fuels have significant drawbacks, such as contributing to global warming and being a scarce resource, they have enabled humanity to flourish. They have provided reliable electricity, improved mobility, and facilitated access to healthcare, food, drinking water, and other modern conveniences.
In summary, fossil fuels are reliable because of their constant availability, well-developed infrastructure, affordability, and ability to meet the world's energy demands. However, the world is gradually transitioning towards green energy, and it is essential to explore more sustainable alternatives to fossil fuels.
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Solar and wind require storage
Solar and wind energy are intermittent sources of power. Solar energy is affected by the season, time of day, clouds, dust, haze, or obstructions like shadows, rain, snow, and dirt. Similarly, wind energy is dependent on the wind blowing. Therefore, solar and wind energy require storage solutions to ensure a steady supply of energy.
Storage technologies coupled with solar power plants include electrochemical storage (batteries) with photovoltaic (PV) plants and thermal storage (fluids) with concentrating solar-thermal power (CSP) plants. Lithium-ion batteries are another storage technology that can capture electricity, store it as another form of energy (chemical, thermal, mechanical), and then release it for use when it is needed.
Lead batteries are one of the most environmentally sustainable battery technologies. They can bolster the grid, helping utilities avoid replacing or upgrading transmission lines. They can also store and optimize renewable energy for use in remote and rural areas with no electricity access.
Pumped-storage hydropower is another energy storage technology based on water. Electrical energy is used to pump water uphill into a reservoir when energy demand is low. Later, the water can be released to flow downhill and turn a turbine to generate electricity when demand is high.
Storage can increase system efficiency and resilience and improve power quality by matching supply and demand. Without storage, electricity must be generated and consumed simultaneously, which can lead to grid reliability issues.
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Frequently asked questions
Yes, solar power is cheaper than fossil fuels. The International Energy Agency's World Energy Outlook 2020 report outlines that solar power is 20-50% cheaper than fossil fuels.
Solar power is cheaper than fossil fuels because it harnesses an already-available resource (sunlight). Solar panels are also easy to install on rooftops or ground mounts. In contrast, fossil fuel use requires the degradation of the earth for fuel production.
Renewable energy requires significant upfront costs for storage technology to make electricity available when customers demand it, not just when it's convenient to produce. Additionally, building transmission lines to carry electricity to customers can be expensive, and fossil fuel plants are often located closer to customers.
Solar power is now the cheapest electricity in history, according to the International Energy Agency. By 2040, oil and gas will remain the largest sources of primary energy, but there will be declines in the use of all fossil fuels. Meanwhile, solar and wind energy will surge, rising nearly seven-fold over the next two decades.
