Stunning drops in the cost of wind and solar energy have turned the global power market upside down. For years, opponents of renewable power have argued they simply aren’t affordable. The reality is quite different. Unsubsidized renewables have become the cheapest source of new power, by far, in more and more countries.
In just one year, the cost of solar generation worldwide dropped on average 17 percent, the report found. The average costs for onshore wind dropped 18 percent last year, while those for offshore wind fell a whopping 28 percent.
The result is “more bang for the buck,” as the U.N. and BNEF put it. Last year saw 138.5 gigawatts of new renewable capacity. That not only beat the 2015 record of 127.5 GW, but it was built with a total investment that was 23 percent lower than in 2015.
After the dramatic cost reductions of the past few years,” explained BNEF chair Michael Liebreich, “unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world—sometimes by a factor of two.”
“It’s a whole new world,” Liebreich said. “Instead of having to subsidise renewables, now authorities may have to subsidise natural gas plants to help them provide grid reliability.”