Solar power has helped the planet and its residents for multiple momentous moments, especially during disasters. Now, solar electricity reaches its lowest price, which was even higher last year.
Solar projects are falling fast. We can tell because the lowest bid in 2016 has been today’s ceiling-price for sun-powered ventures. Bloomberg New Energy Finance (BNEF) reported in April 2016 that a low unsubsidized solar energy price was 3.6 cents per kilowatt-hour (kWh), which was in a March 2016 contract in Mexico.
Just this October, all bids that the Saudi Arabia received for its 300-Megawatt (MW) Sakaka solar project was even cheaper than the reported low price last year.
The lowest bid for Sakaka solar project was 1.79 cents/kWh. It’s six times lower than the average residential price for electricity in the United States, which is 12 cents/kWh.
Although, the recorded lowest bid of 1.79 cents/kWh does not mean it will be the ceiling price for the other upcoming solar projects in the globe, since Saudi Arabia’s market conditions is unique, and it hasn’t been disputed if and how will the bidders, Masdar (by the United Arab Emirates) and French partner, EDF, get profit from that low price, still the other bids were below three cents.
Furthermore, the PV magazine noted that the two lowest bids were “the lowest prices ever recorded at a global level.”
“We believe that the $0.03/kWh can be considered as a point of no return for the Middle East area given its big volume and low financing rate,” solar expert Aymen Grira told PV magazine.
Grira means that this could be the point where three cents becomes the ceiling bid for projects in the region. Over just a couple of months, the ceiling price for solar energy stunningly plunges fast. In March 2016, the recorded lowest bid was 3.6 cents per kWh. However, in May of the same year, Dubai Electricity and Water Authority received a lower bid of 2.99 cents per kWh for 800MW.
On the other hand, Chile, in August 2016 signed a contract for 2.91 cents. NEF chair Michael Liebreich expressed his disbelief in twitter saying, “Solar power delivers cheapest unsubsidized electricity ever, anywhere, by any technology.”
Within just a year, Saudi Arabia garnered bids which were even lower than the “cheapest unsubsidized electricity ever, anywhere, by any technology.”
Is it a good thing or not? What do you think?
This video discusses why solar energy will gain importance in the very near future.
