Solar Power Officially Becomes Cheapest Energy Source in 90% of Countries

Solar energy achieves cost dominance globally

Cost Revolution

The IEA's annual World Energy Outlook confirms that utility-scale solar now costs less than any competing source in 170 of 190 countries analyzed. The average cost has fallen to $20 per megawatt-hour, compared to $50 for new gas plants and $65 for coal.

In sunny regions like the Middle East and Australia, solar costs have dropped below $15 per megawatt-hour – cheaper than operating existing fossil fuel plants, let alone building new ones.

Technology Improvements

Panel efficiency has reached 24% for standard modules, up from 15% a decade ago. Manufacturing costs have plummeted as Chinese producers achieved massive scale, while innovations in perovskite cells promise further gains.

Installation costs have also declined as installers gain experience and soft costs like permitting are streamlined. Residential solar now pays for itself in 5-7 years in most markets.

Storage Integration

Battery storage costs have fallen 80% in five years, addressing solar's intermittency. Solar-plus-storage projects now compete with gas peaker plants for providing power during demand peaks.

Grid operators are increasingly comfortable with high solar penetration, with some regions regularly exceeding 50% solar power during peak production hours.

Climate Implications

The economic case for solar now aligns with climate goals. New solar installations are expected to exceed 400 gigawatts annually by 2026, potentially displacing enough fossil fuels to bend the emissions curve.