Study finds solar now cheapest power source in the world

8 October 2025

Solar power has officially become the cheapest way to generate electricity, costing as little as 2p per unit in the sunniest parts of the world, according to new research from the University of Surrey.

The study, published in Energy and Environment Materials by Surrey’s Advanced Technology Institute (ATI), shows that solar photovoltaic (PV) technology now beats coal, gas and even wind on price – and it’s not just true for hot countries. Researchers found that even in the UK, large-scale solar projects are now the most cost-effective way to produce power.

Global solar installations have also surged, with total capacity topping 1.5 terawatts in 2024 – double what it was just four years earlier. Professor Ravi Silva, director of the ATI, says solar is no longer a “moonshot prospect” but a core part of the clean energy transition.

The report highlights that the price of lithium-ion batteries has plummeted by 89% since 2010, helping make solar-plus-storage systems as competitive as gas plants. These setups allow solar energy to be stored during the day and used later, turning it into a more reliable and flexible power source.

However, the researchers warned that connecting growing amounts of solar power to existing electricity grids remains a major hurdle. In regions like California and China, high levels of solar generation have caused congestion and wasted power when supply exceeds demand.

Dr Ehsan Rezaee, research fellow at the ATI, says smarter grids, AI-based forecasting and stronger regional connections will be vital to keeping networks stable as renewable generation rises.

The study also points to next-generation materials, such as perovskite solar cells, which could boost energy output by up to 50% without needing more land.

But long-term progress, the researchers say, will depend on consistent government backing.

Professor Ravi Silva comments: 

“Progress will depend on consistent, long-term policy support. Initiatives such as the Inflation Reduction Act in the U.S., the EU’s REPowerEU Plan, and India’s Production-Linked Incentive Scheme show how clear direction can drive investment and innovation. Sustained commitment and international collaboration will be essential if we are to accelerate the world’s transition to a clean and reliable energy system.” 

The full paper can be found here.