WoodMac: APAC renewables to outcompete coal within eight years

Facebook
Twitter
LinkedIn
Reddit
Email
Indian PV is already cheaper than coal thanks to a mix of high irradiation, market scale and competition, Wood Mackenzie said (Credit: Bridge to India)

Indian and Australian solar will spearhead a grid parity shift set to take hold of Asia-Pacific renewables within less than a decade, according to Wood Mackenzie.

Renewables’ levelised cost of energy (LCOEs) across the region’s top 12 markets remains 29% higher than coal-fired power but the gap will vanish by 2027, the firm predicted on Monday.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

By 2030, the new analysis estimated, solar and wind will actually be 17% cheaper on average than any fossil fuels across the 12-strong group, spanning India, Australia, China and Japan.

Wood Mackenzie research director Alex Whitworth said the shift will drive a major jump in these markets’ current renewable share of 6%, creating “opportunities” but also “disruption”.

The figures show Indian solar LCOEs (US$38.2/MWh) already outcompete those of the country’s cheapest fossil fuels (US$44.5/MWh), thanks to high irradiation, market size and competition.

Australia, Wood Mackenzie noted, will be second. The country’s past dependency on coal and gas is crumbling, as fossil fuel price hikes and green regulations bolster the case of renewables.

After LCOE drops of 42% over the past three years, Australian PV already outcompetes gas and will reach US$48/MWh next year to catch up with coal, according to the firm.

As Whitworth noted, Australia’s transition won’t be devoid of challenges, including grid impacts and curtailment issues. Energy storage, he argued, is “one of the key options” to shore up supply.

Japan, Indonesia and Malaysia lag behind

Wood Mackenzie’s update examined the grid parity journey of Asia-Pacific’s solar, finding utility-scale PV cost declines of 80% between 2010 and 2019 across the region.

From solar LCOEs (US$344/MWh) above wind’s (US$120/MWh) in 2010, the industry has finally jumped ahead in 2019, achieving US$69/MWh to wind’s US$72/MWh.

For some, however, the going is far slower. Where PV hit LCOEs of US$38.2/MWh in India in 2019, it remained behind in Japan (US$153/MWh), Indonesia (US$106/MWh) and Malaysia (US$88.6/MWh)

All three solar markets – the priciest in Wood Mackenzie’s sample of 12 – will be the only in Asia-Pacific where renewables will not catch up with coal prices by 2030, the firm noted.

The market tailwinds taking Asia-Pacific’s solar to grid parity are pushing the industry towards the same goalpost across the rest of the world. 

In May, IRENA reviewed renewable projects and PPAs and found 83% of the utility-scale PV pipeline commissioned for 2020 will boast prices lower than the cheapest fossil-fuel alternatives.

According to the agency, India and Italy were the world’s most cost-efficient PV markets as of 2018, followed by China, France and Germany.

Others, including McKinsey, have predicted different outcomes for the global grid parity race. In February, the firm said Germany and Spain would hit the goal next year, outrunning India and Australia.

10 March 2026
Frankfurt, Germany
The conference will gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing out to 2030 and beyond.

Read Next

July 29, 2025
US-based solar manufacturer T1 Energy has expressed support for the US government’s tariff investigations into global polysilicon imports and solar products from Laos, Indonesia and India.
July 29, 2025
China's PV industry faced significant challenges, with production across the manufacturing chain growing at a slow pace, according to CPIA.
July 28, 2025
Australia’s Clean Energy Finance Corporation (CEFC) has announced it has invested a record AU$4.7 billion (US$3.09 billion) in large-scale renewables, energy storage, and transmission projects during the 12-month period ending 30 June 2025.
July 28, 2025
KKR has invested AU$500 million in Australia’s CleanPeak Energy to support the rollout of DERs such as rooftop solar PV and battery storage.
July 25, 2025
A round-up of news from the Indian solar sector this week, including Reliance Industries' cell plant, Juniper Green Energy powering solar PV and Solex Energy launching new modules.
Premium
July 25, 2025
At the SNEC expo, Carrie Xiao took the temperature of the industry as it seeks a way out of cutthroat competition and squeezed margins.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK