According to the World Economic Forum, solar power has officially become the cheapest source for new energy, beating fossil fuel.
The Bloomberg New Energy Finance (BNEF) also shows a drop in prices for solar power. According to the report, the mean price for solar power in around 60 countries dropped to $1.65 million per megawatt.
Closely following it is wind as the source of power, at $1.66 million per megawatt.
According to Michael Drexler, Head of Long Term Investing, Infrastructure and Development at the World Economic Forum, the drop in prices are an encouraging sign:
“Renewable energy has reached a tipping point—it now constitutes the best chance to reverse global warming. Solar and wind have just become very competitive, and costs continue to fall. It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”
According to the US Energy Information Administration, approximately “9.5 gigawatts of solar capacity was added to the country’s grid,” which means it is the top energy source for the country in 2016.
“Solar investment has gone from nothing…five years ago to quite a lot,” Ethan Zindler, analyst for BNEF, told Bloomberg in an interview.
Zindler attributed the decrease of prices to China’s massive deployment of solar projects and its assistance to help other countries finance their own solar projects.
“Solar and onshore wind have historically accounted for the majority of clean energy investment globally and their shares have grown substantially in recent years. Together, these technologies accounted for 65% of new clean energy investment in 2011. By 2015, that had risen to 94%,” BNEF said.
Solar has seen increasingly large investments, from 8% in 2011 to over 46% in 2015, according to the BNEF report.
In January, one contract in India set the price at $64 per megawatt hour. In Chile, another contract set the price at just $29.10 per megawatt hour.
“That’s record-cheap electricity — roughly half the price of competing coal power,” BNEF stated.