The agency says that the average costs for electricity generated by solar and wind technologies could decrease by up to 59% by 2025, with solar alone meeting up to 13% of global power needs by 2030.

IRENA has released a new report at the InterSolar conference in Europe, Letting in the Light: How Solar Photovoltaics Will Revolutionise the Electricity System, which found that the solar industry was poised for massive expansion, driven primarily by the cost reductions.

It estimates that solar PV capacity could reach between 1760 gigawatts and 2500 gigawatts by 2030, up from 227GW today and just 40GW in 2011.

“This comprehensive overview of the solar industry finds that these cost reductions, in combination with other enabling factors, can create a dramatic expansion of solar power globally. The renewable energy transition is well underway, with solar playing a central role,” IRENA director-general Adnan Amin said.

IRENA said solar PV is the most widely owned electricity source in the world in terms of number of installations, and its uptake is accelerating, despite the fact it meets just 2% of global energy generation today.

It accounted for 20% of all new power generation capacity in 2015 with investment exceeding $US150 billion.

“World electricity demand is expected to grow by more than 50% by 2030, mostly in developing and emerging economies,” Amin said.

“To meet this demand while also realising global development and sustainability goals, governments must implement policies that enable solar to achieve its full potential.”

Reaching a 13% share of global electricity by 2030 will require average annual capacity additions to more than double for the next 14 years and an investment in battery storage, but it is possible.

An earlier report, The Power to Change: Solar and Wind Cost Reduction Potential to 2025, found that with the right regulatory and policy frameworks in place, solar and wind technologies can continue to realise cost reductions to 2025 and beyond.

It estimates that within a decade, average electricity costs could decrease 59% for solar photovoltaics, 35% for offshore wind, and 26% for onshore wind compared to 2015.

Electricity prices for concentrated solar power could also decrease as much as 43% depending on the technology used.

By 2025, the global average cost of electricity from solar PV and onshore wind will be roughly 5-6 US cents per kilowatt hour.

“We have already seen dramatic cost decreases in solar and wind in recent years and this report shows that prices will continue to drop, thanks to different technology and market drivers,” Amin said.

“Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables.”

Since 2009, prices for solar PV modules and wind turbines have fallen roughly 80% and 30-40% respectively.

With every doubling of cumulative installed capacity, solar PV module prices drop 20% and the cost of electricity from wind farms drops 12%, due to economies of scale and technology improvements.

Importantly for policy makers, cost reductions to 2025 will depend increasingly on balance of system costs such as inverters, racking and mounting systems and civil works as well as technology innovations, operations and maintenance costs and quality project management.

The focus in many countries must therefore shift to adopting policies that can reduce costs in these areas, he said.

“Historically, cost has been cited as one of the primary barriers to switching from fossil-based energy sources to renewable energy sources, but the narrative has now changed,” Amin said.

“To continue driving the energy transition, we must now shift policy focus to support areas that will result in even greater cost declines and thus maximise the tremendous economic opportunity at hand.”

IRENA calculates that solar regularly costs just 5-10 US cents per kilowatt-hour in Europe, China, India, South Africa and the United States, and that costs are falling further with a recent solar PV auction in Dubai attracted a bid of 3 cents/kWh.

Solar PV generation has already reduced CO2 emissions by up to 300 million tonnes per year, and that could increase to three gigatonnes of CO2 per year in 2030 if IRENA’s forecasts are on the money.