Is off-grid solar cheaper?
This is a complex problem. It looks like a simple question, but we don’t know the actual question needs of the questioner, so we need to consider many aspects and set many preconditions for comparison. For example, is off grid solar energy compared with grid connected solar energy, or with other clean energy or traditional electric energy? Do you consider short-term costs or long-term costs? Besides, the development of power industry in each country or region is different. How should we consider this issue in different markets? Moreover, there are many off grid solar energy products in the market. For example, Power -Solution alone has more than a dozen off grid solar lighting products. The functional parameters of various products are different. How should we consider?
If we expand the scope of the problem and focus on solar energy, there will be more data support to illustrate this problem. According to the following research report, solar energy will be one of the main forces of the power industry in the future, and will become the cheapest new energy in many countries.
Global solar power generation: China and the United States account for nearly half of solar power generation
According to the statistics of REN212020, the global PV installed capacity increased by 115GW in 2019, reaching 627 GW. According to the report of BP2020, in 2019, global solar power generation accounted for 2.7% of the total global power generation and 10.0% of the total renewable energy power generation, with a small share, but rapid progress. The countries with the largest solar power generation are China and the United States, accounting for 45.9% of the total global solar power generation.
Development trend of global solar power generation
The report of The Energy Policy Program Statement of the International Energy Agency shows that by the end of 2040, the annual solar power generation may reach 4813TWh, the highest among all power generation categories.
The new report of wood Mackenzie, an international research institution, points out that the cost of solar power generation has decreased by 90% in the past two decades and may decrease by 15% to 25% in the next decade. By 2030, solar energy will become the cheapest new energy in every state of the United States, Canada, China and 14 other countries.
Wood Mackenzie research director Ravi Manghani said: “the world is trying to recover from the economic recession caused by COVID-19. At the same time, all countries are committed to achieving the goals of climate and environment under the Paris agreement. The solar energy has unique advantages in promoting the future of low-carbon and sustainable development.
Solar energy is already the cheapest new form of power generation in 16 states of the United States, as well as Spain, Italy and India. Even if the covid-19 pandemic rages, the global installed capacity will exceed 115 GW in 2020, compared with 1.5 GW in 2006. Although the growth of solar energy to this scale is partly due to government subsidies and environmental targets, solar power generation is now attractive in terms of price.
“Solar energy is becoming so competitive because it is not only a means for corporate buyers to decarbonize, but also a way to reduce the energy cost of their business. Solar energy was once a niche technology in the off grid field, and now it is one of the cheapest, most effective and easiest to deploy power generation methods.” Manghani added.
Wood Mackenzie predicts that the cost of solar energy will be further reduced in the next decade driven by the growth of double-sided products, large-size solar modules and tracker technology. At the same time, it emphasizes that its prospects only take into account the technical improvements that have been fully carried out in the commercial development channels. These forecasts do not assume any breakthroughs in next-generation solar technology or other innovations, which may bring further upward space to the prospect.
But wood Mackenzie cautions that the industry is not risk-free for some participants. As costs fall and solar installed capacity increases, wholesale prices may also fall, reducing profitability. Nevertheless, falling prices will enable solar energy to replace coal and other more expensive technologies and increase its market share.