Solar energy will become the cheapest source of electricity in many parts of the world within the next 10 years, according to a report released by German think tank Agora Energiewende.
The report was commissioned by the independently funded organisation, which is designed to steer Germany towards its 80% renewable energy target.
Chief executive Dr Patrick Graichen said it wanted to see if recent falls in the cost of photovoltaics would continue: “The finding is there’s no end to the cost decline in photovoltaics. The technology still has further improvements so we expect that within the next 10 years photovoltaics will become, in many regions of the world, the cheapest source of electricity.”
He added that in some sun-drenched areas, it would be cheaper than burning fossil fuels.
Dr Graichen said it was surprising that Australia had not taken up the technology to the extent of countries like Germany, as given Australia’s sunny climate solar energy should be thriving.
The study highlighted that while the cost of producing hardware for solar will continue to decline irrespective of local conditions, the financial and regulatory environments will be key to ongoing price falls.
It said stable regulatory conditions were needed to keep the cost of finance down.