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Solar PV prices to drop by 50% by 2030

A more substantial decline in the cost of solar PV will cause it to compete with large-scale power prices by 2030 in the European Union, a research has declared.

Research by the European Photovoltaic Technology Platform (EUPVTP) of the levelised cost (LCOE) of electrical power of solar photovoltaic in the European Union has future costs dropping by 30-50%, making it as good as commercial-scale electricity prices.

"Today, if the real cost of capital was around 5%, a 50MWp PV system in Spain would produce electricity at around €45/MWh. Our analyses indicate that the same type of PV system in the same location may generate power at as low as €25/MWh in 2030," stated Eero Vartiainen, Leader of the LCOE working group of the EUPVTP, a body representing the European PV industry at an EU level.

The evaluation anticipated that solar PV module cost will probably cut in half from the current rate by 2030 and balance of system prices decline by 2035, resulting in a total solar PV system capital expenditure (capex) cut of about 45 percent. In addition, solar PV system ‘operational expenditure (opex)’ will decline an approximated 30 percent. Importantly, the report indicated obtaining such reduction targets such reductions does not need any remarkable technological advances.

"Such results can be achieved without any technological breakthrough," said Gaëtan Masson, co-author of the report. "We simply assume that PV modules and other PV system components will become more efficient and less expensive and that operation and maintenance procedures will be optimised."

One most important impact on LCOE than either ‘capital expenditure or ‘operational expenditure’ will be the capital cost, said the report, which indicated that a rise of 8% points in the designated ‘weighted average cost of capital’ may cause PV LCOE to duplicate.

"What is striking, is that when we modified our assumptions for different PV system cost components, it became evident that the cost of capital will play a much more important role in the competitiveness of this technology than other parameters," stated Christian Breyer, co-author of the report. "Cost of capital will be almost as important as the location of PV systems. This leads to the conclusion that, going forward, it will be of outmost important for the PV industry to further improve the bankability of its technology and for policy makers to create a stable environment for PV investments."

Source: B. Willis, September 3, 2015. PV costs to fall 50% by 2030, rivalling wholesale power prices – EUPVT: http://www.pv-tech.org/news/list [September 5, 2015]

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Douglas Yeboah

Douglas is recently pursuing his PhD program in Electrical and Electronic Engineering at Charles Darwin University, Australia. He holds a Master of Science in Renewable Energy and Distributed Generation from Heriot-Watt University, UK and Bachelor of Science in Electrical and Electronic Engineering from Kwame Nkrumah University of Science and Technology, Ghana with First Class. He is currently examining cost-effective ways to supply electricity, using renewable energy sources, to remote communities.

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