It is now “cheaper to build a new solar facility than to operate an existing fossil fuel plant”

 Yes, you did read that title correctly! A major financial research company has claimed that it is now cheaper to build an entirely new solar facility than to persist with a coal or natural gas plant in many locations.

That seems like quite the claim, but BloombergNEF has stated with confidence that within the next five years, it will actually be more costly to operate existing coal or natural gas power plants than it will be to construct a new solar or wind energy facility. This is supported by a recent report from the International Energy Agency which found that solar energy will soon replace coal as the cheapest source of electricity.


The IEA’s World Energy Outlook has stated that solar energy is going to be at the forefront of a huge increase in renewables over the next decade, with up to 80% of the world’s electricity likely to be sourced through renewables in the not too distant future.

With solar technology constantly improving, as well as solar panel cost continuing to become more and more affordable, it has led to a massive increase in the uptake in solar energy, both in residential and commercial contexts.


A switch from fossil fuels to renewable energy sources will undoubtedly have an impact on certain industries, with Shipping being a clear example. At present fossil fuels suppliers are largely transported by shippers, covering around a third of all cargo miles, with oil occupying around 70% of fossil fuel transport.

The BNEF’s chief economist, Seb Henbest, explained: “There’s quite possibly a rebasing of shipping demand and rail demand, which might mean less energy consumption and lower emissions. If we use renewables to generate electricity, we will see gains mid-stream as well. Overall, this translates into maybe, say, two to three times less primary energy supply.”

We are also likely to see a major shift in utility usage and sourcing, with an increasing number of homes and businesses sourcing much of the energy for their homes and cars from renewable energy. In addition to the obvious financial and environmental savings, BNEF findings also speak to much superior efficiency, stating that while the production of coal-based electricity suffers close to 65% loss, wind and solar energy have zero loss in terms of their generation.


We have long been convinced of the vital nature of solar to the future of energy production, but it is fascinating to see it be stated in such stark terms by such a major financial organisation.