Global solar cost steeply declining; good news to PH

by Myrna M. Velasco – March 13, 2017, 10:00 PM

from Manila Bulletin

Houston, Texas – The global cost of solar technology on generation pricing perspective already tailed off steeply to $0.03 per kilowatt hour (kwh); and storage costs are also sliding to the level of $0.08 per kwh equivalent, according to Ulrich Spiesshofer, chief executive officer of European energy giant ABB Group.

Setting cost references to the Philippines, such price levels would already be at the equivalent of P1.50 per kwh for solar generation; and P4.00 per kwh for storage – trends that spell bad news for a country that would still be stuck in high-price regime of subsidies for renewable energy (RE) developments in the next 20 years.

Beyond generation cost, there are other inherent factors to RE installations that are being integrated into the final pass-on tariff to consumers – these are for construction and other development-related costs.

Nevertheless, global RE industry players are emphasizing that these cost components have likewise been going down significantly over the last five years.

The cost dips, they noted, will be coming even heftier in the years to come as trends already show at current RE installations – such that subsidies or feed-in-tariff (FIT) systems are already being discarded in most markets.

For wind power, China’s Guodian Group noted that this technology may likely reach grid parity by year 2020 – with its generation cost by far leveling to that of coal-fired generation facilities.

Guodian Group Executive Vice President Changjun Xie cited that based on their experience on offshore wind developments, construction cost had already fallen significantly compared to five-year ago cost levels.

Tristan Grimbert, president and chief executive officer of French firm EDF Renewables Energy added that the costs of RE as they stand today infer that “they can be the cheapest – even without the support of subsidies.”

The only project development factors that must be improved upon, he said, would be on “the intermittency” of some RE technologies like solar and wind – primarily the business case for utility-scale storage systems.

Italian firm Enel Green Power Chief Executive Officer Francesco Venturini qualified that while “renewables were heavily subsidized in the past, that’s not the case anymore… and we would see pricing decreasing more and more in the years to come.”