The cost of wind and photovoltaic power generation is falling

Will solar PV and wind costs finally begin to fall again

Electricity generation costs from new utility-scale onshore wind and solar PV plants are expected to decline by 2024, but not rapidly enough to fall below pre Covid-19 values in most markets outside China. Although commodity and

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About The cost of wind and photovoltaic power generation is falling

According to the latest International Renewable Energy Agency report, between 2010 and 2019, unit costs of solar energy decreased by 85%, wind energy by 55% and lithium-ion batteries by 85%.

Solar photovoltaic costs have fallen by 90% in the last decade, onshore wind by 70%, and batteries by more than 90%. These technologies have followed a “learning curve” called Wright’s Law.

The cost of electricity from onshore wind fell by 15%, offshore wind by 13% and solar PV by 13% compared to 2020.

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6 FAQs about [The cost of wind and photovoltaic power generation is falling]

Are solar PV projects reducing the cost of electricity in 2022?

Between 2022 and 2023, utility-scale solar PV projects showed the most significant decrease (by 12%). For newly commissioned onshore wind projects, the global weighted average LCOE fell by 3% year-on-year; whilst for offshore wind, the cost of electricity of new projects decreased by 7% compared to 2022.

Will solar PV & wind be more expensive in 2024?

Consequently, the average LCOE for utility-scale PV and wind could be 10-15% higher in 2024 than it was in 2020. Although their costs continue to exceed pre Covid-19 levels, solar PV and onshore wind remain the cheapest option for new electricity generation in most countries.

Are solar and wind power cost-competitive?

For the last 13 to 15 years, renewable power generation costs from solar and wind power have been falling. Between 2010 and 2022, solar and wind power became cost-competitive with fossil fuels even without financial support.

Will the cost of capital increase in solar PV & wind markets?

In real terms (i.e. excluding the impact of inflation), the weighted average cost of capital (WACC) is expected to increase in most large solar PV and wind markets, excluding China. The higher cost of capital could offset most of the cost decreases resulting from lower commodity prices and further technology innovation in the next two years.

How does technology affect the cost of solar power?

This states that the cost of technology falls consistently as the cumulative production of that technology increases. The chart shows the perfect example of this for solar power. This data comes from the International Renewable Agency, Greg Nemet, and Doyne Farmer & François Lafond.

Why are solar power plants so expensive?

The price of steel, the main construction material for both utility-scale PV and onshore wind plants, increased 75% in China, 160% in the United States and 270% in Europe, while copper and aluminium became 60-80% more expensive. The highest growth was in freight rates, which rose almost sixfold.