By: Kristal Roberts
The cost of clean, solar power energy is falling fast and is expected to continue to do so, well into next decade. According to a 2017 report from Bloomberg New Energy Finance, solar energy will become the cheapest source for producing power around the world over the next 15 years. This is partly because the cost to install solar panels at big “solar farms” and on rooftops is expected to drop 60 percent by 2040.
That translates to about 4 cents per kilowatt (kWh) of energy, which is much cheaper than the 10 cents people pay on average for coal and natural in the United States. The Global Alliance of Solar Energy Research Institutes also issued a report last year, and they’re projecting that the cost of solar energy will drop to 3 cents per kWh as soon as 2020. This is a fraction of the cost from only ten years ago.
Other changes expected on the horizon:
- 15 percent of the world’s electricity will come from solar panels by 2040
- Solar panels will account for as much as 24% of electricity in Australia, 20% in Brazil, 15% in Germany, 12% in Japan, and 5% in the U.S. and India by 2040
- Businesses and citizens are expected to spend $135 million into solar infrastructure each year
The shift to alternative energy sources can be seen everywhere. Only 18 percent of the coal power plants that officials planned for will actually get built. The majority of these projects are expected to be canceled due to dwindling demand for large-scale coal and gas plants.
Problems Facing Utility Providers in the Near Future
It’s becoming clearer that while the solar energy industry’s future looks promising, the same can’t be said for local electric utility companies. Solar panels combined with lower cost battery storage options is expected to nullify the need of utility distribution grids by 2030.
Taking the sun’s energy, converting it to electricity, and having a way to store and swap electrical energy means people will be able to replicate the traditional power grid’s purpose more efficiently, for a fraction of the cause.
So what does this imply?
People will “cut the cord” from utility companies in droves, leading to a sharp decline in revenue.
The Global Impact
If the solar power industry is able to live up to projections of lower costs and easier access, the current electric power systems abroad will not be able to compete either, but this shouldn’t come as a complete surprise. This is the cycle of new technologies. Slowly but surely, they replace the old technology. Much like the CD replaced the cassette tape, and the MP3 player replaced the CD.
The saving grace, for now, is that solar power only works while the sun is shining. Many solar consumers need an electrical backup come a cloudy day or once the sun goes down.
Solar panels often create more energy than needed for consumers, and in certain locations, consumers can sell their extra electricity to local utility companies. It’s called net metering.
State and federal regulators are engaged in serious conversations regarding how consumers with excess electricity should be compensated, or whether they should be compensated at all.
However, once solar consumers combine add battery storage to their solar panels, they will be able to store that excess electricity and reduce their reliance on the power grid.
In the meantime, traditional based energy producers and utilities will need to make strides of epic proportions to survive and remain competitive while facing the new landscape that solar energy has generated.