The cost of solar generation has updated historical minimums, radically changing the balance of power in the global energy market. Against the backdrop of volatile hydrocarbon prices, renewable energy sources (RES) are moving from the category of environmental initiatives into the category of economic and national security issues.
This week, global markets recorded a new historical bottom in the cost of solar energy. As follows from the analysis of the publication Financial Times (FT), spot prices for Chinese photovoltaic modules have fallen to around $0,12 (or £0,09) per watt.
To appreciate the scale of this phenomenon, it is enough to look at the historical retrospective. In 2000, the cost of solar panels was around $6 per watt, and in 1975, at the dawn of commercial use of the technology, it reached astronomical $100 per watt. Such an exponential drop in cost has no precedent for any energy technology in human history.
Experts from the authoritative independent analytical center Ember, cited by FT, characterized the current situation with a succinct phrase: solar energy has become "outrageously cheap".
Geopolitics as a Catalyst for Transition
The record cheapening of technology coincided with a period of deep energy shocks. The worsening situation in the Middle East continues to destabilize global supply chains, creating risks for the transit of oil and liquefied natural gas (LNG). These factors lead to sharp spikes in fossil fuel prices and force governments around the world to seek more reliable, predictable, and sovereign energy sources.
As a result, many countries seeking to insure their economies against imports of volatile hydrocarbons have begun setting new records for the volume of solar power plant commissioning. The cheapness of equipment from China allows such projects to pay off in the shortest possible time.
Global Potential: Resources Exceed Demand by 10 Times
According to Ember analysts, under current macroeconomic conditions, renewable energy sources are the only and most promising development option.
According to the organization's latest large-scale studies, the planet has a colossal margin of safety for a complete transition to "green" energy. Statistics show that 97% of the world's population lives in countries where the combined potential of solar and wind generation exceeds current national electricity demand by more than 10 times.
This means that the constraints on the energy transition today lie not in a shortage of natural resources or the high cost of equipment, but exclusively in the pace of modernizing power grids and in political decisions.
