Installing solar was cheaper than fossil fuels in 2016

Remember when people were talking about when renewables will become cheaper than fossil fuels? Well, the future is here. In a manual addressed to investors, the World Economic Forum (WEF) showed that adding new solar energy was cheaper than fossil fuels in 30 countries.

“Renewable energy has reached a tipping point,” Michael Drexler, who leads infrastructure and development investing at the WEF, said in a statement. “It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”

Image credits: Pujanak / Wiki Commons.

According to the report, solar and wind are already at the same price or cheaper than new fossil fuel capacity in more than 30 countries, and the price for renewables continues to drop. In 2016, in the US alone, utilities added 9.5 gigawatts (GW) of photovoltaic capacity to the grid, making solar the top fuel source for the first time in a calendar year, according to the US Energy Information Administration. Taking into account the solar panels installed additionally, on homes and business (rather than just those built for utilities), the total installed capacity reached 11.2 GW.

The Paris Agreement, in which virtually all global governments agreed to curb greenhouse gas emissions, played a key role in that regard. Even when governments aren’t taking action, the local administration often steps in – and even when they don’t the business sector reacts by itself. In fact, as QZ reports, most of the roadblocks for renewable energy were political, not economical. Global renewable investment last year was $286 billion, or 25% of the $1 trillion goal set by nations at the Paris climate change accord. We’re not there yet, but we’re slowly getting there. The report writes:

“The adoption of the Paris Agreement on 12 December 2015 by 195 governments is a major turning point in the global fight against climate change. To date, 190 governments have committed to specific actions to reduce their national greenhouse gas (GHG) emissions, covering over 95% of total global emissions. While these efforts alone will not suffice in keeping the world climate-safe, these bottom-up national pledges will provide a solid foundation from which ambition can be ratcheted up in the coming years.”

Science and technology also made this possible. We have better materials, better (and smarter) grids, and an overall better technology, which improves the efficiency of renewables. This is largely why prices continue to drop year after year.

“At the same time, the Fourth Industrial Revolution has contributed to a dramatic reduction in technology costs, and new and attractive economics of the sector provide an opportunity for investors to find stable, inflation-protected yields while accelerating much-needed deployment of clean energy.”

However, despite these optimistic trends, the world still lags behind the action needed to avoid catastrophic effects of global warming. Unfortunately, in today’s world, prices and money outweigh everything – and yet ironically, in that dire saddening truth, lies hope. Solar and wind energy are getting cheaper and cheaper, and that may make the biggest difference.

3 thoughts on “Installing solar was cheaper than fossil fuels in 2016

  1. Scottish Scientist

    <blockquote>According to the report, solar and wind are already at the same price or cheaper than new fossil fuel capacity in more than 30 countries, and the price for renewables continues to drop.</blockquote>
    Game over.

    Coal RIP.

    * Off-Shore Electricity from Wind, Solar and Hydrogen Power
    * World’s biggest-ever pumped-storage hydro-scheme, for Scotland?
    * Modelling of wind and pumped-storage power
    * Scotland Electricity Generation – my plan for 2020

    Scottish Scientist
    Independent Scientific Adviser for Scotland

  2. Scottish Scientist

    Time for renewable energy scientists to PARTY! LOL.

    <blockquote>"<b>Escape from Fossil Fuel Hell</b>" – the movie.

    Hauk – "Renewable Energy Plissken. The survival of the human race. Something you don't give a sh it about"

    Snake Plissken: Where's the former Vice-President, Al Gore, the star of "An Inconvenient Truth"?

    Cabbie: The Duke got him. Everybody knows the Duke's got him. You don't have to put a gun to my head. I'll tell you.

    Snake Plissken: Who's the Duke?

    Cabbie: The Duke? The Duke of New York, A-Number-1, the Big Man, the King of Coal, President Elect, Donald Trump that's who!

    Snake Plissken: I wanna meet this Duke.

    Cabbie: You can't meet the Duke! Are you crazy? Nobody gets to meet the Duke. You meet him once and then you're dead!</blockquote>

    Escape from New York Music

  3. Brian

    265B$ mostly solar and wind. Utility solar and wind now average about 1.3$ per Wp Lazard energy version 10.0. over 70GW of solar pv, and about 70GW of wind were installed in 2016. That means a lot of the investment was for this year.

    We need to get the new fossils and nuclear projects canceled, they are dead ends, taking money away from the real solution, and creating long term infrastructure we don't need nor want.

    We also need to ramp up waste to fuels as the backup for solar and wind, long haul transport and chemical feedstock.

    The trillion dollar fossils and nuclear industries are spending millions perhaps billions on pr and influence and it is working some, We need to fight it.

    Fortunately the market wants solar and wind and 60% of all new power installs. In 15 years at the historical 1.8 and 3.5 doubling times, solar and wind will be producing more energy than the world uses today. We don't need 30 or 50 years, we need 15.

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