The technologies critical to clean energy continue to advance at breakneck speed

The economics of the technologies which underpin the shift to clean energy continue to improve:

• The cost of a solar module (the equipment required to generate electricity using solar energy) declined by 3-4% during 2020 notwithstanding tight markets for key inputs (such as glass and ethylene-vinyl acetate laminate). This continues a trend which has seen the cost of a solar module fall by nearly 20%pa for the last 5-years driven by technological efficiencies and manufacturing scale.
• The cost of lithium-ion batteries also continued falling, dropping another 10-15% in 2020 continuing its 5-year trend of c.20% annual cost compression. At this rate of advance, it appears likely that electric vehicles will achieve cost parity with internal combustion engine-powered vehicles by the mid-2020s.

The rate of advance in clean energy technology in terms of efficiency and cost is reminiscent of the 1990s for computer microprocessors.