BP has modelled for solar in the US to deploy at levelised costs of around US5¢/kWh by 2040, despite solar already hitting those prices in much of the country.
The oil and gas major yesterday published the 2018 edition of its Energy Outlook, an annual release of models that charts energy generation, consumption and pricing in the years to come.
This year’s edition charts growth out to 2040 and offers some bullish expectations of renewable generation, and solar in particular, in comparison to previous years.
BP said it was now expecting “particularly strong growth in solar” in the coming years owing to rising carbon prices and continuing regulatory support helping the technology becoming increasingly competitive moving forward.
Indeed, BP said it now expects solar to reach grid parity by the mid-2020s, a decade earlier than previously expected.
BP has also revised upwards the amount of solar it expects to be operational by 2035 by around 150% compared to what it modelled in 2015’s Energy Outlook, again reflecting a faster than anticipated reduction in prices.
But there are questions surrounding BP’s stated price forecasts for North America. A cost curve published within this year’s Outlook shows that it expects the levelised cost of deploying solar in North America to flatten by the 2030s, ultimately reaching roughly US$50/MWh by 2040.
Bloomberg New Energy Finance’s Seb Henbest tweeted in response that prices in the US are already at those kinds of prices.
Sub-$50/MWh PV is already standard today in most places. Sub-$30 in very sunny spots. https://t.co/xPtMadWNUj
— Seb Henbest (@SebHenbest) February 20, 2018
BP’s expectations also fall short of targets established by the US Department of Energy’s SunShot Initiative.
That initiative, which established utility-scale solar LCOE targets for 2020 at US6c/kWh and for 2030 at US3c/kWh, reported marked progress in September last year when the National Renewable Energy Laboratory disclosed that the average price for utility-scale solar in the US had dipped below 6c/kWh three years earlier than targeted.