Energy Transition Handbook - Flipbook - Page 18
A decade ago, the levelised cost of solar was more than US$300 a megawatt-hour
(onshore wind exceeded US$100 per megawatt-hour). Today, solar is US$38 in China
(onshore wind is US$37 in the U.S. and US$30 in Brazil), making it one of the cheapest
sources of new electricity for at least two/thirds of the world’s population.
Prices are set to decrease further, with equipment
costs predicted to also fall, and governments
across the world increasing their cleanpower targets in response to trying to combat
Bloomberg New Energy Finance predicts the
cheapest solar and wind projects will, before 2030,
fall under US$20 per megawatt-hour.
With the rapid rise of solar over the past decade,
what lies ahead?
Firstly, it is clear that the previous perceived
weakness of solar, being that it cannot be a
baseload technology, is losing ground as battery
storage becomes more price competitive. The
levelised cost of electricity for batteries has fallen
to US$150 a megawatt-hour, about half of what it
was two years ago.
Secondly, the off-grid market is set to continue
its rapid ascent; the off-grid solar sector has
expanded into a $1.75 billion annual market
serving 420 million users over the past decade
and continues to grow. As the sector matures
and productive use of off-grid solar solutions
such as solar water pumps, cold storage and
other products servicing public institutions
become natural expansion areas, companies are
increasingly focused on its financial sustainability
and the durability of the technologies used.
Related to this is the acceleration of climaterelated events which have, and will continue
to accelerate global energy decarbonisation
timelines; as far as solar is concerned, the solar
industry will need to find even more efficiencies
to drive the already low cost of solar, even lower.
Cutting edge developments in the industry will be
needed to meet 20% of all global energy, let alone
45% as some scenarios demand. Perovskite-based
modules can be a timely addition to the solar
energy industry’s push to zero energy emissions.
Hogan Lovells is currently advising the Dubaibased solar developer Phanes Group on a 46MW
solar Project in Nkhotakota, Malawi being
financed by the U.S. International Development
Finance Corporation (previously The Overseas
Private Investment Corporation). The project has
secured a 20-year power purchase agreement
with Malawi’s national utility Electricity Supply
Corporation of Malawi Limited (ESCOM).
The new solar park is expected to contribute
significantly to the Malawi government’s goal of
increasing power access to 30% of the population
by 2030, up from 15% currently. It will also help
reduce the country’s dependence on hydropower,
which at present accounts for more than 95% of its