Renewable energy prices set to fall further: Deloitte
Three key enablers — price and performance parity, grid integration, and technology — allow solar and wind power to compete with conventional sources on price, while matching their performance, the report said
New Delhi: Renewable energy sources, notably solar and wind, are reaching price and performance parity on and off the grid globally and, as technologies continue to advance their deployment, prices will likely continue to fall, according to a study by accounting and consultancy firm Deloitte.
Three key enablers — price and performance parity, grid integration, and technology — allow solar and wind power to compete with conventional sources on price, while matching their performance, according to the report “Global Renewable Energy Trends” release today.
“As technologies such as blockchain, artificial intelligence (AI) and 3-D printing continue to advance the deployment of renewables, prices will likely continue to fall and accessibility will improve,” the report said.
The unsubsidized cost of solar and wind power has become comparable or cheaper than traditional sources and new storage options are making renewables more dispatchable — once an advantage of conventional sources.
The report states wind and solar power are now viewed as a solution to grid balancing rather than an obstacle. Also, automation and advanced manufacturing are improving the production and operation of renewables by reducing the costs and time of implementing renewable energy systems.
India has added renewable energy capacity at an average annual growth rate of 20 per cent in the last five years, to become the 4th-largest market after China, US and Germany. “In a couple of years, it is likely to surpass Germany considering the massive renewable energy target of 175 GW by 2022,” said Debasish Mishra, Partner, Deloitte India.
He added solar and wind tariff reaching affordable levels for utilities, as a result of government policies, competition and falling equipment prices, has aided the growth in capacity addition in India.
Financial challenges may lead to emergence of new business models like grid scale corporate Power Purchase Agreements (PPAs), solar parks for SMEs, solar farming to supplement income of farmers, rooftop projects and long-term investors are looking to tap these new business models, according to Mishra.