The solar energy boom continued throughout last year due to a combination of increasing private investment, acceptance of clean energy policies, and reduced equipment costs allowed sustained growth. To end the year solar finally overtook wind as the most cost-effective method of renewable energy production on average (prices for solar depend on a combination of environmental capabilities, existing energy markets in place, available government subsidies and other variables).
Less than a decade ago solar energy was seen as a viable clean alternative energy source that was stuck in the developmental stage. However, in large thanks to massive government investments from China, India, and the United States, solar has moved far past the developmental stage and is now the leading the global transformation in renewable energy sources.
Last year renewable energy became the cheapest form of available electricity in 58 emerging economies, with China investing $103 billion into solar projects in 2016 alone (more than the US, UK, and Japan combined). This type of monetary investment by China (in addition to staggering and profound changes in their energy policies) is having a profound impact on shaping global trends in respect to renewables. India has followed suit in many regards to China, and as these two countries hold the world’s two largest populations (around 1.4 billion persons each), these trends are likely to continue to be emulated by other developing nations as well.
This type of staggering investment has dramatically altered the energy market, as we have continually seen competing firms underbid each other for massive energy contracts. In January of last year a contract was agreed in India to produce electricity for $64 per megawatt-hour, then in August a deal in Chile was set at just under $30 per megawatt hour. These prices are around 50% lower than the price of available competing coal power, making them incredibly attractive alternatives. When you factor in the huge reduction in carbon emissions the time to move away from fossil fuels has never been more obvious.
This should serve as a landmark moment for the renewable and clean energy markets; while we can’t make fossil fuels disappear outright, we can certainly lower our dependence on them. If we can create an energy market where renewables offer the opportunity to save money while leaving a cleaner planet for future generations to preserve then there are almost no barriers to renewable energy eventually replacing fossil fuels entirely.