The world of solar power is changing at lightning speed, and in just the past few months, the energy section has seen the benchmark shift in the king of renewable energy. Instead of looking at size and scale, the new battleground in solar is in price, and it’s cheaper than ever to provide renewable energy.
In any competition, there are winners and losers. Right now, the winners are countries that have fostered efficient, scalable solar power at the grid level. The bright spots, pun intended, aren’t overly surprising. Saudi Arabia’s most recent tariff price of 1.6 cents per kWh was just three-tends of a cent behind the current record. That price, set in Portugal just over a year go, sits at just over a single American penny per kilowatt-hour. That’s a huge deal because it’s considerably less expensive than fossil fuels like natural gas and coal.
While outliers might be impressive, the really important number to look at isn’t the size of new solar panel projects, many of which exceed five, six, even nine-hundred MW arrays. Instead, the overall average price of solar is worth nothing. On average, the average price of solar is just 4 cents per kWh. For the first time in history, renewable technology is less expensive to produce than fossil fuels.
There are still plenty of qualifications, however. One of the obvious and long-standing criticisms of solar is that the sun doesn’t always shine. The viability of solar, and indeed wind, hydro, and other renewables, relies heavily on the rapid improvement of energy storage options. There’s encouraging news there, too. Energy storage companies have made leaps and bounds in technology and it’s spreading just as quickly. Just three years ago, zero of the biggest utility companies in the United States had any investment or partnership in energy storage. In 2019 alone, nearly one quarter and linked up with a storage company to bring the technology to bear at grid scale.
It isn’t hard to do the math, and to apply the same principles on a smaller scale. We anticipate a future where private companies in every industry take control of their energy environment by utilizing cheap solar and wind power systems and energy storage units to handle peak load and consumption variations. Building a microgrid in the next three to five years will put the most forward-thinking firms a decade or more ahead of their competitors. It will also allow them to incorporate more technology as it develops, helping the company to keep its lead for years to come.
If 2019 was the year solar and energy storage saw its real spark, 2020 is bound to be the year it explodes on the energy market. This exciting time of change should spark similar excitement in business owners and facilities managers. Ready to learn more? Call Keen!