Prices for new solar power projects are falling so fast that the cheapest prices from 2016 have become the ceiling price for solar today, reports have indicated.
According to a recent report from ThinkProgress, every single bid that Saudi Arabia received for its 300 megawatt (MW) Sakaka solar project was cheaper than the 2016 price of 3.6 cents per kilowatt-hour (kWh) Mexico received in a March 2016 contract for solar power projects.
It said Saudi Arabia received a low bid price of 1.79 cents/kWh for solar project, and that in context, the average residential price for electricity in the United States was more than six times that – 12 cents/kWh.
Bloomberg New Energy Finance (BNEF) had in April 2016, reported that the record low unsubsidized solar energy price was that of Mexico’s projects, however, the jaw-dropping price of 1.79 cents now puts that behind but that it was not clear if the bidder – Masdar which is owned by the United Arab Emirates, and its French partner, EDF would actually make money at that price.
Yet, it noted that seven of the eight bids were below three cents, and the two lowest bids were the lowest prices ever recorded at a global level.
“We believe that the $0.03/kWh can be considered as a point of no return for the Middle East area given its big volume and low financing rate,” solar expert, Aymen Grira, was quoted to have told PV magazine.
Similarly, in May, Dubai Electricity and Water Authority received a bid for 800MW at a 2.99 cents per kWh, while Chile signed a contract for 2.91 cents for solar power projects in August 2016.