The average costs for electricity generated by solar and wind technologies could decrease by between 26 and 59 per cent by 2025, according to a report released by the International Renewable Energy Agency (IRENA). The report, The Power to Change: Solar and Wind Cost Reduction Potential to 2025, finds that with the right regulatory and policy frameworks in place, solar and wind technologies can continue to realise cost reductions to 2025 and beyond.
It estimates that by 2025, average electricity costs could decrease 59 per cent for solar photovoltaics (PV), 35 per cent for offshore wind, and 26 per cent for onshore wind compared to 2015. By 2025, the global average cost of electricity from solar PV and onshore wind will be roughly 5 to 6 US cents per kilowatt hour. Since 2009, prices for wind turbines have fallen roughly 30 to 40 per cent. With every doubling of cumulative installed capacity, the cost of electricity from wind farms drops 12 per cent, due to economies of scale and technology improvements. Importantly for policy makers, cost reductions to 2025 will depend increasingly on balance of system costs (e.g. inverters, racking and mounting systems, civil works, etc.), technology innovations, operations and maintenance costs and quality project management. The focus in many countries must therefore shift to adopting policies that can reduce costs in these areas.
