Solar energy is now the world’s cheapest source of power, a Surrey study finds

Solar energy is now so cost-effective that, in the sunniest countries, it costs as little as £0.02 to produce one unit of power, making it cheaper than electricity generated from coal, gas or wind, according to a new study from the University of Surrey.

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In a study published in Energy and Environment Materials, researchers from Surrey’s Advanced Technology Institute (ATI) argue that solar photovoltaic (PV) technology is now the key driver of the world’s transition to clean, renewable power.

Even here in the UK, a country that sits 50 degrees north of the equator, solar is the cheapest option for large-scale energy generation. Globally, the total amount of solar power installed passed 1.5 terawatts in 2024 – twice as much as in 2020 and enough to power hundreds of millions of homes. Simply put, this technology is no longer a moonshot prospect but a foundational part of the resilient, low-carbon energy future that we all want to bring to reality. Professor Ravi Silva, Distinguished Professor, Interim Director - Institute for Sustainability (IfS), Director - Advanced Technology Institute (ATI) and Head of NanoElectronics Centre

The research team also found that the price of lithium-ion batteries has fallen by 89% since 2010, making solar-plus-storage systems as cost-effective as gas power plants. These hybrid setups, which combine solar panels with batteries, are now standard in many regions and allow solar energy to be stored and released when needed, turning it into a more reliable, dispatchable source of power that helps balance grid demand.

Despite many reasons to be optimistic, the ATI research team points to several challenges – particularly connecting large amounts of solar power to existing electricity networks. In some regions, such as California and China, high solar generation has led to grid congestion and wasted energy when supply exceeds demand.

Connecting growing levels of solar power to electricity networks is now one of the biggest challenges. Smart grids, artificial intelligence forecasting and stronger links between regions will be vital to keep power systems stable as renewable energy use rises. Dr Ehsan Rezaee, Research Fellow