In its recent report The Power to Change: Solar and Wind Cost Reduction Potential to 2025, International Renewable Energy Agency finds that by 2025 – with the right regulatory and policy frameworks in place – average electricity costs could decrease 59% for solar photovoltaics (PV), 35% for offshore wind, 26% for onshore wind, and up to 43% for concentrated solar power compared to 2015.
While equipment costs will keep declining, reductions in balance-of-system (e.g. inverters, racking and mounting systems, civil works, etc.), technology innovations, operation & maintenance and capital costs are becoming increasingly important drivers for overall cost reduction. Cost reductions will be driven by increasing economies of scale, more competitive supply chains and technology improvements that will raise capacity factors and/or reduce installed costs. Governments in many countries need to be more proactive in terms of setting the right policy framework to facilitate solar and wind power cost reduction.
Since 2009, prices for solar PV modules and wind turbines already have fallen 80% and 30-40% respectively.
