Solar is now the cheapest form of energy in history, says IEA

The International Energy Agency has now released its World Energy Outlook for 2020 onwards. It’s a highly comprehensive document that spans 464 pages, which cover a number of predictions and observations about the global energy sector’s current trajectory and its likely future. Notably, the IEA officially states solar to be the cheapest electricity in history, having become cheaper than coal and gas in most major countries.

It goes some way to reinforcing why commercial solar has become so popular for businesses right here in the UK. Not only does it provide significant lifetime cost savings for organisations, but also helps them reach their target of achieving Net Zero, helping them fulfil their environmental responsibilities while maintaining their appeal to an ever more climate-conscious public. The IEA’s full World Energy Outlook is available to buy on its website should you choose to, but we’ll save you a bit of time by recapping its key points about solar below.

Cost of solar is dropping by as much as 20% to 50%

This year’s World Energy Outlook has been influenced by some quite dramatic recent developments on the global stage, not least of which is the ‘extraordinarily turbulent’ impact of Covid-19, and the uncertain future of global energy use over the next 20 years. Renewables continue to see sustained growth within the world’s energy markets, as the global reliance of fossil fuels continues to decline.

The IEA posits that there are four possible ‘pathways’ to 2040, all of which maintain this steady growth of renewables. Solar energy in particular has demonstrated exceptional growth in the past few years, and the IEA’s ‘main’ scenario involves 43% more solar output by 2040 than it first expected in 2018. It’s a significant jump, and it’s partially to do with the fact that solar is now some 20% to 50% cheaper than the IEA initially estimated.

What’s more, it now predicts that these steadily dropping costs and exponential growth of solar means that there will be record-breaking additions of new solar capacity every year from 2020 onwards.

Net Zero and ‘the new king’

According to the IEA, all this distinguishes solar as the ‘new king’ of the flourishing renewables market, which is on track to meet the majority of the world’s power demands.

The rapid demand for renewables is tied to a ‘structural decline’ for fossil fuels such as coal, which is in part due to the increasing ambition of global climate policy. There is some encouraging news that global C02 emissions have therefore effectively peaked, but the IEA warns that this is far from the “immediate peak and decline” that’s required to stabilise the environment.

In other words, it’s no time for the world to rest on its laurels. Without even more ambitious climate policies from world leaders, there could be a rise in demand for gas by as much as 30% by 2040.

One of the key takeaways from the report is that as individuals, businesses and nations, we should all be aiming to reach Net Zero. It might not always be an easy target, but it’s perfectly achievable, and only if we keep up the pressure. The IEA is quick to point out that it will require what it called “unprecedented” efforts from all sectors, not just the energy industry.

And if you’re looking to achieve the Net Zero target for your own business, you’re in exactly the right place. Here at Low Carbon Energy, we have over 30 years of experience in helping businesses to transform their energy supply. Each of our installations is bespoke, and we tailor your solution on your specific energy profile, helping us to maximise carbon reductions and save you up to thousands of pounds in energy bills. Feel free to look at our case studies for just a few examples of businesses which have reaped huge rewards from solar, such as Computacenter and Haven Power. To find out how we can help you, feel free to give us a call today on 01282 421 489!