According to a report by the International Renewable Energy Agency (IRENA), the cost of renewable energy sources fell to record lows again in 2018. The report finds that costs from all commercially available renewable power generation technologies declined in 2018.  

The global weighted-average cost of electricity declined 26% year-on-year (YoY) for concentrated solar power (CSP) (26%), followed by bioenergy (14%), solar photovoltaic (PV) and onshore wind (both 13%), hydropower (12%), geothermal, and offshore wind (both 1%).

IRENA has analyzed the component cost, its database of projects, and over 9,000 auctions to arrive at these findings. India was estimated to have the lowest total installed cost for new utility-scale solar PV projects that were commissioned in 2018 at $793/kW, 27% lower than for projects commissioned in 2017. Both China and Italy also saw very competitive installed costs for 2018 at $879/kW (23% lower than in 2017) and $870/kW (9% lower than in 2017) respectively. Japan had the highest installed costs at $2,101/kW, which was 3% lower than for projects commissioned in 2017.

China and the United States have aggressively ramped up onshore wind projects, with an increase of 18.5 GW and 6.8 GW, respectively. The weighted average levelized cost of energy (LCOE) of newly commissioned onshore wind farms in 2018 in China and the United States was 4% lower than in 2017. Both India and Brazil experienced a slight increase in the weighted-average LCOE of projects commissioned in 2018; this could be due to the rise in emerging market currencies.

The report also states that globally, onshore wind and solar PV are now lower than fossil fuel-based energy sources. New solar and wind installations are also expected to undercut the operating-only costs of existing coal-fired plants. Consistently falling cost of renewables make them the essential for energy decarbonization.

IRENA has tracked and analyzed the cost evolution of renewable power since 2012. It estimates that three-quarters of the onshore wind and four-fifths of the solar PV project capacity due to be commissioned in 2020 should produce cheaper electricity than any coal, oil, or natural gas option without financial assistance.

In 2018, 94 GW of new solar PV capacity was added, accounting for 55% of total new renewable power generation capacity additions. The largest markets to add new capacities in 2018 were China (44 GW), India (9 GW), the United States (8 GW), Japan (6 GW), Australia and Germany (4 GW), and the Republic of Korea, Mexico, and Turkey (around 2 GW each).

The global weighted-average LCOE of utility-scale solar PV in 2010 was $0.371/kWh, while by 2018 this has fallen to $0.085/kWh, 77% lower than in 2010. The YoY decline in 2018 was 13%.

In China, the weighted-average LCOE of new utility-scale solar PV plants commissioned in 2018 declined, YoY, by 20%, to $0.067/kWh. The decline in India was 21%, to $0.063/kWh.

In April 2019, Mercom reported on IRENA’s report which stated that India and China’s efforts in establishing Asia’s leadership role in solar. The report highlighted that new solar and wind energy installations are mostly driving the growth in renewable capacity expansion, accounting for 84 percent of all new capacity installed in 2018.

In December 2018, IRENA had reported that total global energy storage capacity could triple by 2030. It also projected that the total installed cost of a lithium-ion battery in stationary applications could fall by 54 percent by 2030.

Mercom had previously forecasted 8 GW of solar PV installations in India in 2018 due to a lack of a strong project pipeline. Recently, Mercom reported that the Indian solar market installed 8,263 MW in 2018, down 15.5 percent compared to 9,782 MW in 2017 as the safeguard duty, GST issues, and land and transmission issues took a toll on large-scale installations.