Wind power is now comparable in price to fossil fuels, and solar is well on its way, according to a new report that confirms earlier predictions that renewables aren't just the best option for the environment - they're unequivocally the smartest long-term investment you can make on energy.
The report, by Bloomberg New Energy Finance, found that in the second half of 2015, the global average cost of onshore wind energy will be $83 per megawatt-hour of electricity (which is down $2 from the first half of the year), and for thin film solar photovoltaics, the cost is $122 per megawatt-hour (down $7 in the past six months).
The costs as they are now, and the steady drops we've seen in price over the past six months alone, suggest that as the technology to eke out more and more electricity from solar and wind energy gets ever-more sophisticated, those prices can only continue to fall.
"You start to go from a world where renewables are expensive, to a world where renewables are actually cheap. And that's very meaningful," said Seb Henbest, head of the Europe, Middle East, and Africa analysis for Bloomberg New Energy Finance. "Onshore wind is today competitive in many places in the US and around the world with coal and gas fired generation technology."
The report based its analysis on what's known as the 'levelised cost of electricity', which takes into account several factors such as interest rates, capital expenditures, and the operating costs of facilities, and uses these to compare different energy sources on a dollar value. The team analysed over 55,000 projects around the world to come up with their global average figures.
In terms of breaking it down more specifically into locations, the report found that while coal-fired electricity costs $75 per megawatt-hour in North and South America (up from $66 per megawatt hour), in Europe, you'll have to fork out $105 for the same amount. And gas-fired electricity costs $82 in the Americas, on average (up from $76 per megawatt hour), and $118 in Europe.
Those higher costs for fossil fuels in Europe - due in large part to government-regulated carbon policies - make it even more of a no-brainer for them to be getting into renewables, with the report finding that the average cost of wind is $85 per megawatt-hour in the UK and $80 in Germany, while the combined average for coal and natural gas was more than $100 per megawatt hour in both countries.
"In China, by contrast, coal-fired electricity generation remained extremely cheap - just $44 per megawatt hour," Chris Mooney reports for The Washington Post. "Wind, in contrast, cost $77 and solar photovoltaics, $109."
Mooney adds that the US is also not quite there yet, with the incredibly cheap average price of coal- and gas-fired electricity sitting at $65, while wind sit at $80 per megawatt-hour and solar at $107. The good news is that a lot of the cost of renewables is up-front - installation, construction, and the initial period of energy harvesting.
Unlike the process used to convert fossil fuels to electricity, converting renewable energy to electricity doesn't require fuel, which means solar, wind, and even the currently expensive wave power sources will continue to get cheaper.
"Clean energy solutions like wind and solar are getting more affordable and more accessible by the day, meaning they are increasingly the smartest long-term financial investments for utilities and other electricity producers across America," Michael Brune, the executive director of US-based environmental organisation, the Sierra Club, said in a statement. "The transition to a clean energy economy is going full speed ahead and pushing dangerous, dirty fossil fuels to the back of the line."