What is a learning curve? Basically, a learning curve describes how a process becomes more efficient as more output is produced. This could be used to predict future cost reduction of solar PV.
1. The Learning Curve
Solar PV is very disruptive to the electricity grid. It is expected to be cheaper by 32.6% for every doubling of installed capacity, based on the learning curve shown in the figure below. As a comparison, the recently trending wind energy is expected to be cheaper by only 15.9% for each doubling of capacity.
2. Solar PV Cost Forecast
Assuming there are no unfavorable policies or drastic changes to business models of utility grids, solar PV cumulative capacity is projected to increase to 1,213 GW in 2024 as shown in the figure below. Under the learning curve relationship, solar PV cost is expected to fall to 0.05 USD/kWh.
On the other hand, the price of hydro energy being the cheapest renewable energy, has seemed to be stagnant at 0.05 USD/kWh since 2010. Furthermore, other forms of renewable energy have much weaker learning curves compared to solar PV. Therefore, these developments suggest that in the current trend, solar PV will likely become the cheapest renewable energy in 2024.