Levelized Cost of Energy (LCOE) comparison showing when renewable solar electricity became cheaper than oil-based power generation. Data sourced from IRENA, Lazard, and IEA reports.
In 2010, solar PV cost ~$0.38/kWh — nearly 4× more expensive than oil-fired power at the time (~$0.10/kWh). By 2017, utility-scale solar crossed below oil, and by 2024 solar had fallen to ~$0.04/kWh while oil remained at ~$0.12/kWh — solar is now 3× cheaper. For oil-dependent economies like the UAE, this crossover signals that domestic solar can replace oil-fired generation at a fraction of the cost, freeing oil for export or petrochemicals while cutting emissions.
Countries like the UAE that derive major revenue from oil exports face a structural shift: renewable energy is no longer just an environmental choice — it's the cheapest option. The economic logic now favors diversifying energy generation into solar and redirecting oil to higher-value uses (export, plastics, aviation fuel). The cost gap will likely widen further through 2030 as solar continues declining ~5-10% annually while oil costs remain volatile and structurally higher.