Last Updated on December 22, 2023 by Nandini Shukla
Green energy dominates the power sector by reducing emissions and producing environmental benefits with low-cost alternatives. The consumption of renewable energy has been fueled by its falling cost. In the past decade, large-scale solar projects have become 85% cheaper. Advanced technology has lowered renewable energy costs. Shortly, green energy will replace traditional fuels because of its significantly falling prices, the International Renewable Energy Agency (IRENA) reported. Below, we will describe in detail which source of green energy is the cheapest and why.
Previously, coal energy was considered the most affordable type of renewable energy. In contrast, wind and solar energy have replaced coal energy because their power plants are significantly less expensive than coal plants. By 2050, it has been anticipated that 50% of the world’s electricity will be produced by cheap batteries and low-cost renewable energy driving more solar and wind power. The cost of solar and wind power will fall significantly year after year, IRENA said.
The falling prices of solar and wind energy have given valid reasons for both developed and underdeveloped countries to gradually eliminate coal energy consumption. This will enable the countries to save costs, generate new jobs and meet their energy needs. In addition to reducing CO2 emissions, shutting down coal plants would save about three gigatonnes of coal each year.
Renewable energy demand is inversely correlated with its cost because the increasing needs and green energy demand drive down its prices. The market continues to rise to make it affordable for companies to invest and sell more. Investments in green energy are worthwhile since they consider environmental sustainability and financial stability.
The project cost of solar photovoltaics, offshore wind projects, and onshore wind projects has fallen by 7%, 9%, and 13%, respectively, IRENA reported. Operating a solar or wind plant is now more cost-effective than a fossil fuel plant. Further, government subsidies are one of the main reasons for the affordability of renewable energy. Government offers energy subsidies to people and companies that enable them to use renewable energy sources. Such financial incentives cut down the cost, making it more affordable to opt.
Solar power is the cheapest energy source and will cut down the consumption of gas and coal, making net-zero emissions achievable by 2050. Growing economies would have to sevenfold their annual investments to meet rising energy demands. They need to invest over $1 trillion in clean technology to achieve carbon neutrality in the coming years.
With the addition of renewable energy projects, developing economies have saved up to $156 billion in 2020. Transferring financial resources to renewable energies will boost emerging countries, provide employment opportunities and offset carbon emissions. Similarly, the world bank hopes to allocate 28% of its financial resources to projects with environmental benefits.