The latest research suggests the world’s energy users are already making significant changes to their energy use and the costs of those changes are increasing.
Energy analysts at research firm BIS Economics say that, over the next five years, the global average price for a gallon of fuel is likely to drop from $0.27 per gallon to $0, and the average price of energy storage from $2.99 per kWh to $2 per kWh.
“This means that the average energy user is saving about $1 per kilowatt-hour (kWh) by reducing their energy consumption and by adopting an energy efficient home or business,” BIS chief economist and author Dr Tim McInnes said.
“In terms of total energy savings, the increase in the price of electricity will have a greater impact than the increase on household energy use.”
The energy analyst has also calculated that the cost of solar energy is falling by more than 70 per cent in just a decade.
In 2016, it cost $1.39 a kilowatthour to produce a kilo of solar power.
But the cost has dropped by more if you include the costs for installation and the cost for inverters.
The price of gas has fallen from $1 to $1, and that of diesel by a similar amount.
The research was commissioned by the Clean Energy Council and the Clean Air Council.
The group’s chief executive, Matthew Dutton, said the research showed that energy costs were falling and was the result of the adoption of renewable energy.
“It means that we are seeing the first signs of a transition to low carbon and more efficient energy sources,” Mr Dutton said.
The study found that the uptake of solar and wind power in some regions had already exceeded the penetration of gas-fired power plants.
“Solar is being adopted at a faster rate than gas in some parts of the world,” Mr McInnaes said.
”But gas is already replacing more than half of all electricity generation.
“The cost of wind and solar is actually falling because of the rapid adoption of them.”
BIS economists have estimated that the world is on track to peak energy demand by 2025, at which point electricity prices will drop to $US1 per kWh, or $US4.20 a tonne, by the end of the century.
The cost of renewables has also fallen, with the cost per kilo falling from $US2.90 in 2010 to $USD0.99 in 2017.
Mr McIngnes said the price drop was because of greater adoption of energy efficient buildings and homes.
“There is now a trend for homes and buildings to be more energy efficient and efficient buildings have a much greater effect on energy usage and therefore on overall energy use,” he said.
While Mr McINnes said there was a significant gap between the average and average prices for energy storage, energy experts had been warning that there was little to stop the price fall from increasing.
“Even if the price falls by 10 per cent, it would still not have much of an impact on overall price,” Mr McNinnes said, because the energy storage market would still be small and growing fast.
He said the data could also be used to inform decisions about where energy is spent in Australia, particularly in the energy sector. “
You could see a dramatic impact on prices over the coming years.”
He said the data could also be used to inform decisions about where energy is spent in Australia, particularly in the energy sector.
“Energy storage is going to be part of the future of Australia because the future is going up, so we will need to consider where our energy comes from,” he predicted.