Solar Power Is the Cheapest Electricity in History

In its 2020 World Energy Outlook, the International Energy Agency delivered a verdict that reshaped energy economics: “For projects with low-cost financing that tap high-quality resources, solar PV is now the cheapest source of electricity in history.”

The shift came from plummeting costs. The IEA found solar 20-50% cheaper than it had estimated just a year earlier, partly because investors now lend to solar at low interest rates. In sunny regions with cheap finance, new solar can be built for $20 per megawatt-hour or less — below the cost of running existing coal and gas plants.

Solar PV, the agency declared, is becoming “the new king” of electricity supply.

The consequence is structural. The cheapest way to generate a unit of power, in much of the world, is now to point silicon at the Sun — a reversal of more than a century in which coal, oil, and gas set the price floor for electricity.