A new report from the International Energy Agency (IEA) presents a clear picture for when electricity generated from renewable energy sources might surpass non-renewable generation. Developments in Europe and the US over the last year have propelled significant investment into solar power and that trend is likely to carry over into the next half decade. Most recently, the US and European Union (EU) have rolled out plans to accelerate and expand permitting within their respective borders.
Related ETF: Invesco Solar ETF (TAN)
Per a new report from the International Energy Agency (IEA), renewable energy overall will become the largest source of global electricity generation by early 2025, and the world will add twice as much renewable capacity from 2022 to 2027 as in the previous five years. The Financial Times notes solar power generation, specifically, is expected to surpass coal’s generation by the end of that period.
Solar is already the most cost effective form of energy generation. Back in 2020, the IEA crowned solar power the “new king” of global electricity markets, the cheapest form of electricity in history. As MRP highlighted, the IEA measured the levelized cost of energy (LCOE) for solar between $35 to $55 per megawatt hour (MWh) in some of the world’s biggest markets — the US, Europe, China, and India. The cost for coal at that time ranged between about $55 and $150 per MWh. In recent months, costs for coal-powered capacity have soared and, though natural gas prices have come down from their highs, gas futures remain elevated well-above prices across their previous 10-year trend.
Investment in solar and other renewables has surged throughout the past year in the wake of turmoil in fossil fuel markets caused by geopolitical events. As MRP has noted in the past, renewable energy systems like solar can help isolate nations’ grids from the risks involved with oil and gas – fuels that are concentrated heavily in certain nation-states and are only supplied to others at the discretion of their producers. A naturally recurring…
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