1. The verdict: solar is highly competitive, but not magic

The title “solar is the cheapest electricity in the world” is powerful. It attracts attention. But to be accurate, it needs to be framed with nuance.

In 2024, IRENA estimates the global average LCOE of utility scale solar photovoltaics at $0.043/kWh. Onshore wind is estimated at $0.034/kWh. This means solar is extremely competitive, but the claim “solar is always the cheapest” would be too absolute.

The distinction matters. The production cost of a solar kWh is not the only criterion. A power system must also supply electricity at the right time, in the right place, with enough power, even at night, in winter or during periods of low renewable production.

Solar often wins the cost battle. But a renewable power system must also win the flexibility battle.

The future of electricity therefore does not rely on one technology alone. It relies on a complete architecture: solar, wind, batteries, the grid, interconnections, demand management, hydropower where available, and sometimes other more dispatchable renewable solutions.

At the level of a home, this logic translates into a simple question: how can solar panels, the heat pump, the EV charger, the solar battery and the electrical installation be connected into one coherent system?

2. How can we reach almost 100% renewable electricity?

Achieving a very high share of renewables does not simply mean adding more solar panels. The real challenge is systemic. We need to produce a lot of renewable electricity, but also shift it over time, transport it, manage it and consume it intelligently.

This is exactly the logic of a flexible home: produce locally, shift certain uses and avoid consuming electricity at the wrong time whenever possible.

In its Net Zero scenario, the IEA estimates that by 2050 almost 90% of global electricity could come from renewable sources. In this scenario, solar photovoltaics and wind together represent nearly 70% of global electricity generation.

3. What share could solar represent in the future electricity mix?

There is no single percentage that applies to every country. The optimal share of solar depends on sunlight, consumption patterns, the grid, available storage, wind potential and the level of electrification of end uses.

But we can give a robust order of magnitude: in a highly renewable power system, solar could represent around 30 to 40% of electricity generation in many long-term scenarios. Wind could represent a similar share, sometimes higher in very windy countries. The rest would come from hydropower, sustainable bioenergy, geothermal energy, renewable imports, storage and flexibility.

For a home, this question also relates to energy uses: some appliances are naturally better aligned with solar production. You can explore this topic further in our guide on appliances compatible with solar panels in Luxembourg.

Component of the future mix	Possible share in a highly renewable system	Main role	Limit to anticipate
Solar photovoltaics	Around 30 to 40% depending on regions and scenarios	Produce very competitive electricity during the day, on buildings, car parks and ground-mounted plants.	Lower production at night and in winter, especially in Northern Europe.
Onshore and offshore wind	Around 30 to 40%, sometimes more in very windy countries	Complement solar, especially at night, in winter and during certain less sunny periods.	Public acceptance, permits, connection and more sensitive costs for offshore wind.
Hydropower	Highly variable depending on geography	Provide more controllable renewable production and sometimes pumped storage.	Limited potential in many countries and dependence on hydrological conditions.
Bioenergy, geothermal energy and other renewables	Smaller but strategic share	Complement the system with more stable or local resources.	Limited resources, variable costs and the need for genuine sustainability.
Storage and flexibility	Not net generation	Shift electricity over time, reduce peaks and stabilise the grid.	Short-term storage is progressing quickly, while seasonal storage remains more complex.

4. Current LCOE: which sources cost the least?

LCOE, or levelised cost of electricity, measures the average cost of producing one kWh over the lifetime of an installation. It is a useful indicator for comparing technologies, but it is not enough on its own to assess the real value of an energy source within the power system.

Here are the 2024 global orders of magnitude for several renewable technologies, according to IRENA.

Technology	Global average LCOE 2024	Quick reading	Conclusion
Onshore wind	$0.034/kWh	Very competitive, often the cheapest on global average.	Major pillar
Utility scale solar photovoltaics	$0.043/kWh	Very competitive, quick to deploy, with costs sharply reduced since 2010.	Major pillar
Hydropower	$0.057/kWh	Competitive and useful for flexibility where the territory allows it.	Strategic complement
Geothermal energy	$0.060/kWh	Interesting because it is more controllable, but dependent on local potential.	Locally relevant
Offshore wind	$0.079/kWh	Very powerful in coastal countries, but more complex and more capital intensive.	Strong potential
Concentrated solar power CSP	$0.092/kWh	Can integrate thermal storage, but remains suited to certain climates.	Specific case

Solar is therefore clearly in the group of the cheapest technologies. But if we want to be rigorous, we should say: solar and onshore wind are now the two major economic champions of new electricity generation.

For a homeowner, the analysis must also include the real cost of a project, subsidies, the possible battery and the quality of the quote. On this topic, see our guide: solar panel quote Luxembourg 2026: prices, subsidies and points to check.

5. Future LCOE: will costs continue to fall?

Solar has already experienced a spectacular decline. According to IRENA, the average cost of solar photovoltaics fell by around 90% between 2010 and 2024. It would therefore be risky to assume that the same decline will continue at the same pace.

The next improvements will not come only from the panel. They will mainly come from the whole system: power electronics, installation, standardisation, batteries, energy management, connection, financing and grid management.

The choice of equipment is therefore becoming strategic. At Ecoclima, we present some of the products and brands used for installations in Luxembourg, including panels, inverters, batteries, heat pumps and EV chargers.

Element	Likely trend	Impact on future LCOE	What to watch
Photovoltaic modules	Costs are already very low, with possible but more gradual gains.	The panel alone is becoming less often the main cost item.	Supply chains, quality, warranties, component origin.
Inverters and electronics	Smarter, more integrated and more connected products.	Improved performance, monitoring and energy management.	Battery compatibility, cybersecurity, lifespan.
Batteries	The IEA estimates that storage costs may still fall significantly by 2030.	Solar with battery becomes more competitive and more useful to the grid.	Life cycle, recycling, safety, sizing.
Installation and labour	Possible standardisation, but local costs remain variable.	Significant impact for residential projects, especially in Europe.	Installation quality, availability of installers, roof complexity.
Grid and connection	Investments are needed to absorb more variable production.	System cost becomes more visible than panel cost.	Local capacity, delays, technical rules, flexibility.
Financing	The cost of capital remains decisive.	Higher interest rates can increase the final cost despite cheap technology.	Regulatory stability, subsidies, prefinancing models.

6. The major challenges to solve

Solar and wind have become competitive, but that does not make the transition automatic. The obstacles are no longer only technological. They are also electrical, administrative, industrial and social.

The main weakness in the reasoning “solar is the cheapest, so the problem is solved” is that it confuses production cost with system cost. Producing a cheap kWh is one step. Supplying reliable electricity all year round is another.

At building level, these challenges often translate into concrete choices: electrical panel, protections, available power, compatibility between equipment and installation quality. This is why general electrical work becomes an essential foundation for solar, EV charging and energy renovation projects.

7. Why storage is becoming essential

Storage is one of the elements that turns solar from simple variable generation into a much more useful resource. It makes it possible to consume in the evening some of the electricity produced during the day, reduce peaks, secure certain uses and improve self-consumption.

According to the IEA, innovation could reduce battery storage costs in the power sector by up to 40% by 2030 in its current policies scenario. This decline makes the solar + battery combination increasingly competitive.

For a home, the question is not only “do I need a battery?”, but rather “what capacity, what power and for which uses?”. Our guide solar battery Luxembourg: kWh vs kW explains this point in detail, especially for demanding uses such as electric vehicle charging.

Solution	Typical duration	Usefulness	Concrete example for a home
Residential battery	A few hours	Shift solar production towards the evening.	Use solar electricity for lighting, cooking or certain appliances after sunset.
Grid battery	A few hours	Stabilise the grid and absorb renewable surplus.	Less visible for homeowners, but essential at system scale.
Smart charging	Variable	Charge an electric car during solar hours.	Schedule charging during the day when the home is producing. See also our guide to charging an electric car with solar panels.
Thermal storage	Hours to days	Store energy as heat or cooling.	Heat a domestic hot water tank or preheat the building at the right time.
V2H and V2G	Variable	Use the vehicle battery as an energy resource.	To be monitored depending on car compatibility, charger compatibility, grid rules and economic model.
Long-duration storage	Days to season	Respond to long periods of low renewable production.	Less suited to an individual home, more relevant at grid or industrial scale.

8. What this changes for homes in Luxembourg

In Luxembourg, photovoltaics are no longer a marginal topic. Klima-Agence indicates that the country had 32,000 photovoltaic installations connected to the grid at the end of 2025, around 26,000 self-consumption installations and around 1,200 sharing groups.

Luxembourg is also a highly interconnected country. A solar home should therefore not be designed as an energy island. It should be designed as an intelligent building block within a wider grid.

The photovoltaic prefinancing introduced in 2026 in Luxembourg also increases the relevance of the topic, because it allows the Klimabonus subsidy to be deducted directly from the final invoice under certain conditions. This does not change the physics of the system, but it can reduce the initial financial barrier.

To see concrete projects, you can also consult our Ecoclima references in Luxembourg.

9. Action plan for a coherent solar home

A good installation is not about installing as many panels as possible. It is about designing a system adapted to the building, the real uses and the future evolution of electricity consumption.

Horizon	Action	Goal	Priority	Effort	Impact
Quick win	Analyse annual consumption and hourly peaks.	Size the solar system according to the real building profile.	High	Low	Strong
Quick win	Shift certain uses to daytime.	Increase self-consumption without heavy investment.	High	Low	Medium to strong
Medium term	Study a battery if the consumption profile justifies it.	Use more solar electricity in the evening.	Medium to high	Medium	Strong if properly sized
Medium term	Install a controllable EV charger.	Turn the electric car into a priority solar use.	High if electric vehicle	Medium	Strong
Medium term	Coordinate solar, heat pump, air conditioning and electrical panel.	Build a coherent energy system.	High	Medium	Strong
Long term	Prepare for more management, sharing and flexibility.	Prepare the home for future electrical uses.	Medium	Variable	Strong long term

To move from theory to a concrete project, the most reliable step is to request a clear study: roof, power, equipment, possible battery, EV charger, subsidies, prefinancing and electrical constraints. You can start with our page on photovoltaic installation in Luxembourg or by contacting Ecoclima directly.

Most frequently asked questions (FAQ)

Is solar really the cheapest electricity in the world?

Solar photovoltaics are among the cheapest sources for producing new electricity capacity. But according to IRENA’s 2024 global averages, onshore wind still comes out cheaper than utility scale solar. The most rigorous wording is therefore: solar and onshore wind are now the two major economic pillars of new electricity generation.

Can we reach 100% renewable electricity with solar only?

This is not the most robust assumption. Solar mainly produces during the day and more in summer. An almost 100% renewable system must combine solar, wind, storage, the grid, demand management and other renewables depending on local resources.

What share could solar represent in the future electricity mix?

In many long-term scenarios, solar could represent around 30 to 40% of electricity generation, with strong variation depending on the region. Wind could represent a comparable share, sometimes higher in very windy countries.

Why is wind still important if solar is so competitive?

Wind often produces at different times from solar, especially at night and during certain winter periods. This complementarity reduces the need for storage and makes the power system more stable.

Is a battery essential with solar panels?

Not always. A battery becomes interesting when the household’s consumption, the price of electricity, available subsidies and building uses justify it. Before adding a battery, the real consumption profile must be analysed. See also our guide on the solar battery in Luxembourg.

Does LCOE correspond to the price paid on the electricity bill?

No. LCOE measures the average production cost of a technology. The price paid by a household also includes the grid, taxes, supplier fees and market conditions. For a home, the value of solar depends mainly on self-consumption and sizing.

What is the right solar system for a home in Luxembourg?

There is no single answer. The right system depends on the roof, orientation, consumption, the presence of an electric car, a heat pump, air conditioning, a possible battery and the electrical constraints of the building. To go further, consult our renewable energy FAQ in Luxembourg.