Instead, Bloomberg NEF's paper argues, many politicians and media commentators have failed to realise just how competitive with conventional electricity solar PV power generation has become over recent years.
The study, entitled Reconsidering the Economics of Photovoltaic Power, examines the implications of falling solar PV costs recently. Average PV prices have fallen by 75% over the past three years, meaning that solar power is now cost competitive with mainstream electricity generation in a number of countries. The paper also finds that the metrics used to measure the economics of solar power may often be biased against the deployment of PV and are generally inadequate (see our article here too, which explores this issue: Ed).
The paper further argues that the shift in prices holds major implications for policy makers and investment decision makers, particularly when faced with power generation choices and concerns about tariffs and other relevant fiscal measures.
Many decision makers and commentators remain unaware of the latest developments in the economics of solar power stemming from technology cost and price reductions, and furthermore, recent falls in costs and prices have reflected reductions in manufacturing costs and are not solely due to stock liquidation or other short-term factors.
Finally, estimates based on concepts of ‘grid parity’ and other factors can be misleading due to the complexity of the electricity system.
The aim of the paper is to brief policy makers, senior executives in utilities, investors and advisory services, particularly in high-growth developing countries which are engaged in reviewing the various power generation options available.