The cost of renewable energy sources like wind and solar continue to fall drastically, and it was only a matter of time before they were cheaper than fossil fuels. The International Renewable Energy Agency (IRENA) believes that’ll happen by 2020 based on their new report. Prices could be as low as three cents per kilowatt-hour for onshore wind and solar photovoltaic projects over the next two years.
Across the board, average costs of producing renewable energy projects have been very competitive. Hydropower was the cheapest at five cents per kilowatt-hour, onshore wind at six cents, and bioenergy and geothermal sources at seven cents. Solar projects are still high in comparison at 10 cents per kWh, but that figure has dropped 73 percent since 2010. That’s led to residential systems being 67 percent cheaper.
Onshore wind has fallen by 23 percent in the same timeframe. Based on projects that have been auctioned and will be in development over the coming years, renewable energy will end up being competitive or even cheaper than fossil fuels by 2020. Auction prices for solar photovoltaic and onshore wind projects have reached a record-low three cents per kWh in places like Dubai, Mexico, Chile, Brazil, Canada, and Germany.