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Solar Energy Will be the Cheapest Power Source by 2025

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In a mere decade, solar energy plants will be the least expensive power source in the world. According to a study commissioned by the Agora Energiewende, an independent German think tank dedicated to research on the future of the electrical power system, “the cost of producing power in central and southern Europe will have declined to between 4 and 6 cents per kilowatt hour, and by 2050 to as low as 2 to 4 cents.”

Solar photovoltaic prices have fallen by 80% since 2008. Technological advancement in the past two decades has led to drastic declines in the cost of power from wind and photovoltaic (PV) systems. Solar power has already proven to be cost-effective, with plants popping up all over the world. The desert country of Dubai recently signed a power purchase contract for 5 cents per kilowatt hour, and Germany has already been delivering power for less than 9 cents.

Each day brings fresh news of solar power plants either in the plans or being put into effect. Just last month, Apple announced that it will be investing close to $1 billion into a solar power plant being built by First Solar in California. Rajasthan, India is planning to build a series of solar parks to provide 10,000MW of power in the next decade and, in just two short years, the McCoy Solar Energy Project in Riverside County, California, with a capacity of 750MW, will most likely be the largest solar power plant in the world upon completion.

However, the electricity generation costs for solar power depend heavily on financial and regulatory frameworks. This is due to the high capital intensity of photovoltaic installations

“Favourable financing conditions and stable legal frameworks are therefore vital conditions for cheap, clean solar electricity. It is up to policy makers to create and maintain these conditions,” said Dr. Patrick Graichen, Director of the Agora Energiewende. If all of the factors mentioned by Graichen come into place, the next ten years will prove to be a boon to electricity users.

Written By- Natalie Durakovic


Alfa Energy Group

Alfa Energy Group is an international energy, water, and sustainability consultant partner with 200 employees over 4 international locations. For over 25 years, Alfa has been servicing its clients’ needs through energy and water management, sustainability, and compliance consulting, and an intuitive ecosystem of user-driven energy, water, and carbon management software platforms. With coveted awards, an international industry-wide recognition, and clever simple solutions, today Alfa is partnering with clients to establish and deliver pivotal net zero strategies. Through smart energy management, the expertise and diligence of its people, transparent processes, and data management, Alfa continues to lead through its recognised gold standard of service delivery.