HSBC reports that the cost of solar power fell to just USD0.36 per watt by the end of 2016. This price, at USD100 / MWh, makes solar cheaper than coal in some parts of the world.
As a consequence, large solar-power parks are being planned around the globe with deals to generate electricity from sunshine for less than half the average global cost of coal power.
Further, with economies of scale – every time total production of solar panels doubles, the cost drops by 20 per cent plus improvements in the panels’ efficiency.
This month we reported on the publication of major reports from three of the most high-profile think-tanks in the climate finance arena – ODI, WRI and IIED – all calling for significant change in operating methodology for MDBs, DFIs, multilateral and bilateral funders.
One of our key thoughts was that a significant element of all reports was the quest for behaviour change rather than more official climate funds from their various sources. Through for example, enhanced risk leverage and pricing more keenly.
By marrying these two reports, cost leverage from economies of scale in solar and funding leverage from enhanced risk leverage, the result is exponential benefits for the climate mitigation switch away from coal.