Are Renewable Prices following Moore’s Law?

September 22, 2019

Moore’s Law has famously defined the rapid drop in price and increase in power of computer processors. For context, make sure to click on and watch the animation above.

The corollary for the solar industry is Swanson’s Law.

Yahoo Finance:

Moore’s Law might be dead, but Swanson’s Law remains alive and well.
Swanson’s Law is the observation that solar PV panels tend to become 20 percent cheaper for every doubling of cumulative shipped volume. It’s the solar industry’s equivalent of Moore’s Law, which predicts the growing computing power of processors. But as the semiconductor industry has discovered, the observation that processing power increases exponentially at a two-year or so cadence has hit a physical limit.
Fortunately, Swanson’s Law is yet to come up against such a brick wall, and solar energy costs have continued to come down precipitously for decades–without exception. And now the renewable energy industry is about to cross a major milestone that will truly set it on the path towards becoming the world’s predominant energy source.

According to a report by the International Renewable Energy Agency (IRENA) cited by Reuters, beginning in 2020, electricity generated by solar PV and onshore wind is set to become consistently cheaper than the most cost-effective fossil fuel alternative, without subsidies.
In essence, more than 80 percent of solar PV and 75 percent of onshore wind power deployments to be commissioned next year will be cheaper than the cheapest new oil, natural gas, or coal-fired sources as per the report.

This report has a pretty wide scope, having been compiled from IRENA’s own members, governments, consultancies, industry groups, business journals, auctions, and tenders. IRENA’s membership includes research institutes, project developers, utilities, and power companies across 160 countries, all of which contribute data for its Renewable Cost Database.

Source: Bloomberg New Energy Finance

According to the IRENA report, the global weighted average cost of power generated using solar energy fell another 26 percent last year compared to the previous year. Bioenergy costs declined 14 percent, solar PV and onshore fell 13 percent, hydropower was 12 percent lower, while offshore wind was 1 percent cheaper last year. Costs of as low as $0.03-$0.04 per kilowatt hour (kWh) for solar PV and onshore wind have already become a reality in some parts of the globe.
IRENA estimates that the global average cost of electricity for solar PV will clock in at $0.055/kWh in 2020, then fall another 13 percent to $0.048/kWh in 2021. As for onshore wind, corresponding estimates are $0.049/kWh and $0.045/kWh in 2020 and 2021, respectively.
Road to 100% renewable energy
At the turn of the century, the idea that renewable energy could become a major source of energy during our lifetimes would have sounded incredible, even preposterous. After all, fossil fuels were just too dominant and much cheaper, while renewable energy faced seemingly insurmountable technical, cost, and integration challenges.
Yet the impossible could be about to happen.
Over the past decade, renewable energy has experienced transformative changes, enabling it to play a very significant role in our energy industry. The solar industry has in particular been a standout performer thanks to remarkable price declines by solar PVs and increasing grid flexibility.
According to data by the Solar Energy Industries Association (SEIA), U.S.’ cumulative operating solar PV capacity stood at 62.4 GW by the end of 2018–about 75 times the installed capacity just a decade ago– supplying 1 percent of the country’s electricity needs.

5 Responses to “Are Renewable Prices following Moore’s Law?”

  1. mboli Says:

    The median installed price of US utility-scale solar PV was about $2.00 per watt in 2017. This is from LBL Electricity Markets Policy Group.
    Does this suggest that the price of solar cells is not the biggest part of the cost any more? If solar cells became free this year, the LCOE from utility-scale solar would drop further by only a little?

    • rhymeswithgoalie Says:

      For existing home installations the limiting factor will be labor costs to mount panels and reconfigure Ye Olde Breaker Box. New-built homes are much more likely to be built with standard interfaces for the panels.

  2. rhymeswithgoalie Says:

    FWIW, the YouTube version starts at 1965:

  3. Canman Says:

    If there were a nuclear buildout, something like Swason’s law would also apply, and it would almost certainly be better for human well-being and the environment.

    Wind and solar do not follow anything like Moore’s law. They’re bounded by energy density limits. A better computing analogy would be to compare fossil fuels to vacuum tubes. Nuclear energy offers a transistor/integrated circuit level improvement. Wind and solar are like going back to slide rules and abacuses.

    The same applies to batteries. They can only improve marginally. they can’t become ten times more energy dense. Energy storage will need some kind of new conceptual improvement (perhaps carbon nano-tube flywheels).

    I would recommend reading Mark Mills’ report:

    • rhymeswithgoalie Says:

      Moore’s Law would have been moot without decades of major private investment money to power it. I don’t see how that would work in today’s environment with so many failed projects and promises about nuclear tech.

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