The falling cost of renewable energy means nuclear power can’t compete with cheap solar poweri n developed countries.

This is revealed in a new report by the International Renewable Energy Agency (IRENA), which tracked falling renewable costs across the world in 2017.

Global renewable energy costs are falling so fast they could be consistently cheaper than fossil fuels by 2020, IRENA says.

That’s good news for solar power and energy storage batteries worldwide.

In fact, the report highlights the “remarkable” fall in electricity costs from utility-scale solar PV projects since 2010.

Solar PV module costs have also fallen by around four-fifths over the same time. This makes residential solar power systems as much as two-thirds cheaper than in 2010.

Cheap solar benefits business and households

The cost equation for renewable energy just keeps on getting better, the report finds. This is because costs drop at a faster rate as installation accelerates.

This means Australian households and businesses can be confident that:

Solar power is cheaper than new nuclear power in developed countries.

Levelised cost of electricity (LCOE) from solar photovoltaics (PV) fell by 69% between 2010 and 2016.

The global weighted average LCOE of utility-scale solar PV has fallen 73% since 2010.

The deflation rate for solar PV from 2010-2020 is 35%, the highest of all renewables.

The deflation rate is based on learning rates for the 2010-2020 period. The learning rate is the percentage cost reduction experienced for every doubling of cumulative installed capacity.

The cost outlook for solar and wind electricity to 2020 is the lowest yet seen for these modular technologies. This makes wind and solar the most attractive renewables by cost.

Renewable auction results big factor towards 2020

According to the report, auctions give valuable price signals about future electricity cost trends.

Interestingly, the report also finds auctions account for a small fraction of global renewable energy deployment. Yet this type of competitive procurement is rapidly driving down costs in new markets.

Record low auction prices for up-and-coming projects confirm that costs will continue to fall through 2020 and beyond.

In Australia, the Victorian Renewable Energy Auction Scheme (VREAS) is aiming for 25 per cent clean energy state-wide by 2020 and 40 per cent by 2025.

Successful bids from recent auctions in Australia have seen ‘remarkable’ results in the USD 0.03 to USD 0.04/kWh range, the report notes.