For years American Solar insiders have looked at cost forecasts missing the goal. Now new research confirms which trends in the industry have already been made clear by 2023: most 2050 projections for solar, wind and batteries were not even in the same margin.
Researchers have discovered that historical projections of costs for solar and energy storage consistently underestimated the pace of price decreases. In the study “Are we too pessimistic? Cost projections for photovoltaic solar energy, wind energy and batteries estimate the actual costs to overestimate worldwide““The authors reveal that about half of the 2050 cost projections are already on the same way with today’s prices.
A special goobsmacking finding: about 2050 predictions for the utility-scale solar capital expenditures (Capex) on the current market prices of today by 30%.
In the graph below, the fixed black line with the “actual Capex” label represents 2023 values of around $ 500/kW. The surrounding projection lines, which extend until 2050, show that half of the studies predict the prices above that level, and half below.
It has long been a running joke in the solar industry that the International Energy Agency (IEA) repeatedly underestimates global solar growth. There is even one now famous graph Lamponing a decade of missed IEA predictions. The chronically confused prospects of the agency reflect are long existing historical coordination with older energy sectors: oil, gas and coal.
But even within the sun sector, there is a tendency to temper expectations. Predictors often strive to look measured and adult, sometimes to a mistake. Wood Mackenzie is known for publishing Cautious solar projectionsOnly to revise them up the following year. Bloombergnef tends to get the process well, but still to the attention of the volume, with forecasts of the first quarter on average about 10% lower Actual implementation since 2011.
The researchers compare hardware prices and live costs of electricity (LCOE) projections of 40 studies and 150 scenarios in the photovoltaic photovoltaic solar energy, solar energy, onshore and offshore wind and lithium-ion batteries.
As the graph above shows, a few studies have succeeded in following the decrease in solar prices on Utility scale from 2020 to 2022, but no one provided the steep cap that followed the collapse of the prices of Polysilicon as the supply chains of the COVID era recover.
An example of this growing “Overton -Prize Klader” comes from the National Renewable Energy Laboratory (NREL) from the US Department of Energy, which houses some of the most respected solar experts in the country.
“The ATB report 2015 of the NREL estimated the average LCOE for PV on Nutschaal at $ 91/MWH (2024 USD) in the year 2050. Conversely, the latest report of 2024 expected an average of $ 21/MWH (2024 USD) for the same year, a 77% reduction.”
In a separate part, the authors mention similar shifts in the projected Capex:
“The ATB 2015 estimated the average Capex for PV on the utility scale at $ 1500/kW (2024 USD) in the year 2050. Conversely, the last report of 2024 expected an average of $ 700/kW (2024 USD) for the same year, a cost reduction of 53%.”
That is more than 50% decrease in the capital needed to use smarter, long -term hardware, in addition to a 77% reduction in the expected electricity costs. In both cases, long-distance projections were intended to stretch and surpassed for 35 years and surpassed in less than 10.
The story is comparable for lithium-ion batteries, except that we are still in the steepest and most exciting part of the price decreases.
The graph above shows that projections for lithium ion storage in the years 2010 are rapidly lagging behind reality. The prices fell from $ 450/kWh to around $ 175/kWh by 2020, while the most optimistic projections still cost around $ 250/kWh. The data, collected until 2024, shows that the falls real price destruction continue to exceed the predictions.
As usual, long -distance predictions have already been flattened. Most 2050 predictions cluster over a wide range of $ 60- $ 360/kWh, although recent bids for the short-term projects are already coming in on or below $ 60/kWh.
It is tempting to assume that these steep price decreases must slow down quickly. But that assumption continues to be wrong.
How much solar energy will be installed in 2025? What about 2026? Despite the growing evidence of fast acceleration, many predictions remain the process of Lowball Solar. The IEA once claimed that 600 GW of solar energy per year was needed to achieve climate goals – a target that was achieved last year. Bloomberg initially projected 700 GW for 2025, but has since revised that number upwards. Some analysts now believe global installations could reach 1 tw Next year, although caution still prevails in many models.
Efficiency profits can soon become the dominant path to lower LCOE. Li Zhenguo, founder and former CEO of Longi Green, sees the potential for Perovskiet-silicon tandem cells to achieve 44% efficiency. He also noted that any increase of 1% in the efficiency of module results in approximately a 5% reduction in LCOE.
To put that in context: if an LCOe from 2022 for solar energy on utility scale was around $ 50/MWh with panels with approximately 22% efficiency, a shift to 43% efficient dental modules could push LCOE up to $ 17/MWH.
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