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The price of solar energy: Comparing competitive auctions for utility-scale solar PV in developing countries

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  • Dobrotkova, Zuzana
  • Surana, Kavita
  • Audinet, Pierre

Abstract

This paper examines the viability of low PV prices in developing countries from recent competitive auctions and discusses the sustainability of these low prices for further market expansion. Our analysis of utility-scale PV projects procured through major auctions in developing countries between 2013 and 2016 reveals that low PV prices are viable. PV prices of $0.06–0.08/kWh are consistent with market fundamentals and prices lower than $0.03/kWh are viable under exceptional conditions in some countries. Maintaining low prices while ensuring deployment of quality projects requires a combination of high capacity factors, low equipment prices, low cost of capital, de-risked investment environments, e.g., through the presence of guarantees, and other factors such as particular project developer strategies. Overall, developing countries with abundant local solar resources are well-positioned to drive the global expansion of PV capacity. Well-designed auctions offer a unique opportunity to expand solar PV capacity to many markets in a cost-effective manner.

Suggested Citation

  • Dobrotkova, Zuzana & Surana, Kavita & Audinet, Pierre, 2018. "The price of solar energy: Comparing competitive auctions for utility-scale solar PV in developing countries," Energy Policy, Elsevier, vol. 118(C), pages 133-148.
    • Handle: RePEc:eee:enepol:v:118:y:2018:i:c:p:133-148
    DOI: 10.1016/j.enpol.2018.03.036
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