According to a report published by the International Renewable Energy Agency (IRENA), 163 GW of new renewable power will be installed in 2021, which is cheaper to generate than coal-fired power. That includes a 13% drop in solar costs over the past year, despite a rise in module prices. 

Compared with 2020, the cost of onshore wind has fallen by 15 percent, offshore wind by 13 percent, and solar by 13 percent, according to the International Renewable Energy Agency's cost of Renewable Power Generation to 2021. Among them, the war between Russia and Ukraine caused the price of coal and natural gas to rise, and also made the cost of thermal power generation rise further. Despite a good year for solar power in 2021, the situation has reversed this year. In the first half of the year, with the energy crisis caused by the conflict between Russia and Ukraine and the aggravation of global inflation, energy prices have become a trend. In the field of solar energy, upstream polysilicon soared to a 10-year high, triggering the price rise of the whole industry chain, and also promoting the price rise of downstream solar energy. The rise has been particularly pronounced in Europe and the US, where the conflict between Russia and Ukraine has hit hardest. According to a recent LevelTen Energy report, Europe's power purchase agreement price (PPA) rose 47% year on year as the continent's Energy crisis continued and inflation soared. The P25 index of solar quotes rose 19.1% to 59.43 euro /MWh in q2, almost 10 euro higher than q1 2022.

 
Solar energy prices in Europe have risen, more because of the energy crisis caused by the outbreak of conflict between Russia and Ukraine. In June this year, spot prices on the European Power Exchange once exceeded 400 euros/MWH, close to a record high, equivalent to 3-5 yuan/KWH. On the other hand, the rising price of solar modules has also driven up the cost of solar power generation in Europe, which is also one of the main factors in the price rise of solar energy. 

The rise in solar prices in The United States, though less dramatic than in Europe, is no less severe and more a result of policy factors. In the second quarter of this year, a decade-long decline in the cost of renewable energy in the United States even reversed as a result of draconian policies. According to LevelTen Energy's quarterly index that tracks renewable Energy deals, first-half US solar power purchase agreements (PPA) prices are 25.7% higher than last year. PPA prices for solar and wind are up 29.7% combined. PPA for P25 solar and wind energy reached $41.92 /MWh, up 5.3% from the previous quarter and more than 30% year-on-year. 

The rise in solar prices in the US is influenced by the soaring value of the photovoltaic industry chain on the one hand, but more importantly by policy factors. In the first half of this year, the US Department of Commerce launched an investigation into solar products in Southeast Asia, which directly led to the soaring cost of solar production in the US and a large number of stalled solar projects in the US. In the U.S., too, inflation, logistics disruptions and rising labor costs have led to soaring solar costs, reversing a decade of declining costs for the renewable energy sector.