Solar energy is now cheaper than coal and gas in most countries, IEA reports

Energy produced by solar panels is now cheaper than that produced by coal- or gas-powered plants in most nations, the International Energy Agency said Tuesday in its annual report on global energy trends. Assuming governments follow through on their detailed energy policies, renewable energy will account for 80 percent of the market for new power generation by 2030, and coal will count for less than 20 percent of the global energy supply by 2040 for the first time since the Industrial Revolution, the IEA predicted.

"I see solar becoming the new king of the world's electricity markets," IEA executive director Fatih Birol said in a statement Tuesday. "Based on today's policy settings, it's on track to set new records for deployment every year after 2022." Hydroelectric power will continue to be the biggest source of renewable energy for a while, but as the cost drops on photovoltaic panels, solar will catch up quickly, the IEA said.

Governments will need to invest heavily in upgraded power grids and energy storage to manage solar, wind, and other energy that isn't generated at all hours, Bloomberg reports, but the market is playing a big role in shaping energy consumption, too.

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"Today, hundreds of billions of dollars of capital are flowing into clean energy," Bruce Usher, an investor and professor at Columbia Business School, told CBS MoneyWatch. "That bucket for investors is not about policy," he added. "It's about where you can get the biggest return."

Last week, for example, the Florida renewable power producer NextEra Energy at least briefly became the most valuable energy company in the U.S., its $143.8 billion market value eclipsing ExxonMobil's by $900 million and Chevron's by about $2 billion. Exxon brings in way more revenue, $255 billion last year, than NextEra's $19.2 billion. But NextEra's profit margins have recently been as high as 50 percent and investors expect solar and wind to trump fossil fuels in the near future.