As renewable energy technology continues to develop and the market expands, it's getting cheaper. In Asia last year, renewable energy was 13% cheaper than coal for the first time, Electrek reports.
The data comes from a recent analysis by global energy company Wood Mackenzie. The report looked at gas, coal, on- and offshore wind, residential and utility solar, and various grid storage arrangements prices from last year.
According to Electrek, the report found that the cost of starting a new solar project decreased sharply in 2023. As a result, the overall cost of solar power fell by 23% across the Asia Pacific region, and solar is now the cheapest power source in 11 out of the 15 countries there.
The most notable change was a 40-70% decrease in the cost of solar and wind power sources in China. This country is expected to maintain a 50% lead in renewable energy costs moving forward and produce an oversupply that it can export.
The report also examined "distributed solar," or solar panels on individual properties. The cost in the region dropped by 26% in 2023, meaning it's still 12% cheaper than buying power, even with the sharp price drops for renewable energy.
Solar and wind power get more affordable all the time — plus, they're extremely clean, generating no air pollution that would raise the Earth's temperature.
By contrast, Electrek reports that coal and oil prices have risen 12% since 2020 and are projected to keep increasing through 2050. Soon, these outdated power sources likely won't be able to compete with clean energy.
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That's a good thing because burning coal and oil pumps toxins and heat-trapping gases into our atmosphere. The sooner the world switches to solar and wind, the better it will be for the planet and our wallets.
Alex Whitworth, vice president and head of Asia Pacific Power Research at Wood Mackenzie, was concerned about the transition.
In the report, he said, "Solar power costs have reached a historic low in the Asia Pacific region in 2023, reversing fears of permanent cost inflation. But while low costs support a continued boom in renewables investments, there is concern among investors on profitability, grid integration, backup, and energy storage. Government policies will play a crucial role going forward."
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