Solar Energy Perspectives - IEA

Chapter 10: Policies
distinguish perceptions from realities. The gap between the true cost of support (the subsidy
part) and the amount of investment increases at each doubling. The cost of PV support will
peak and then decrease. It disappears after the break-even point is reached. A similar
reasoning would apply to solar thermal electricity.
Ignoring discount (interest) rates, the calculation does not depend on any particular agenda.
Speeding or slowing the diffusion of PV does not modify the bill. Optimising the deployment
agenda would require introducing discounting and selecting hypotheses on the likely
evolution of market electricity prices, competing technologies and environmental benefits,
which are beyond the scope of this chapter. Examples are found in WEO 2010 with an
assessment of the costs of support policies to 2035 in the New Policy Scenario for renewablesbased
electricity generation (Figure 10.1).
Figure 10.1 Global support for renewables-based electricity generation
in the New Policy Scenario
Other renewables
Wind
Solar CSP
Solar PV
Biomass
140
120
100
80
60
40
20
Billion USD (2009)
0
2007 2008 2009 2015 2020 2025 2030 2035
Note: Other renewables include small hydro, geothermal and marine power.
Source: IEA, 2010b.
Key point
Incentives for wind power diminish but incentives for solar electricity grow up to 2035.
WEO 2010 also provides a comparison between overall electricity prices, including CO 2
prices, and the impact of renewable support – calculated in the European Union, the United
States and Japan. This greatly helps in putting the growing support costs in perspective. In
2009, support for renewable generation in the OECD+ countries ranged from USD 2/MWh
to USD 8/MWh, equivalent to an average increase over and above the wholesale prices of
9%. Over the entire projection period, the average amount of the financial support for
renewable generation per unit of total electricity produced (that is, electricity from both nonrenewable
and renewable sources) in the 450 Scenario is almost 30% higher than current
levels. Despite the increase in the absolute level, the share over and above the wholesale
price declines to just 6% on average in the OECD+ countries. In the European Union it is
equivalent to 8% of the wholesale price, in the United States to 5% and in Japan to 3%
(Figure 10.2).
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