According to the International Energy Agency (“IEA”) in its 2020 World Energy Outlook, “For projects with low-cost financing that tap high-quality resources, solar PV is now the cheapest source of electricity in history.” The U.S. Energy Information Administration reports a 92% decline in the cost of photovoltaic generated solar from its 2010 its 2020 projections.
Here’s a chart comparing the decline in the cost of solar vs. other forms of electricity from 2009 – 2019:
In its 2021 Global Energy Outlook, the IEA notes that “Global CO2 emissions from electricity generation increased by just 9% over the last decade even though electricity demand rose by 25%.” This is due to the rapid expansion of renewables, such as wind and solar, providing 65% of the electricity demand growth globally, and the switch in major emitters (like the US) switching from coal-generated electricity to gas-fired plants.
It’s tough to project what future energy use will look like as technologies advance and various government policies change the relative costs of different fuel sources. In a critical review of the IEA’s projections, researchers at the University of Technology — Sydney note how far below reality the IEA’s projections for solar have been. Notably, “The projection for 2020 reported by [the IEA} in 2010 had been already achieved in 2012, eight years in advance and two years after the publication.”
The black line on the below chart is the actual installed PV solar and the colored lines are the prior IEA projections.
The decreased cost of solar has roughly followed Wright’s Law which states that for every cumulative doubling of units produced, costs will fall by a constant percentage. Wright’s Law is similar to Moore’s Law which roughly states that the speed of microprocessors doubles about every two years. While Moore’s Law is stated in terms of time (.e.g. 2 years for a doubling), Wright’s Law is a function of scaling up capacity — price declines as more solar is installed. Here’s a look at the drop in the price of PVs on a logarithmic scale: