The past few years have seen the rise of large-scale, low-priced solar energy projects around the world. Oil-producing countries in the Middle East, in particularly the United Arab Emirates and Saudi Arabia, have become unexpected leaders in this movement with record-low power purchase agreement prices, below 3¢ kWh−1, for a number of new photovoltaic installations, beating the cost of fossil fuel generation. In this Analysis, we bring together technical, economic and financial information from global and local sources to study whether these prices can be replicated elsewhere and further reduced. We find that hardware costs, cost of labour, favourable cost of capital, low taxes and low, but positive, profit margins contribute to the reduction in costs. Reduced hardware prices contributed the most and also led to further reduction in cost of capital. We demonstrate how similar costs can be and have been achieved in other markets.
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The data that support the plots within this paper and other findings of this study are available from the corresponding author upon reasonable request.
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We note the valuable contribution of our colleagues with whom we have discussed this work, in particular I. Almansouri and A. Tuomiranta. We thank M. Kissamitaki for designing the figures.
The authors declare no competing interests.
Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Supplementary Notes 1–3, Supplementary Figures 1–2, Supplementary Tables 1–2, Supplementary Discussion, Supplementary References
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SSRN Electronic Journal (2019)
Nature Energy (2019)