Since the second half of 2019, the global levelized cost of electricity (LCOE) for onshore wind has fallen 9% to $44 a megawatt hour and 4% for utility scale PV to $50 a megawatt hour. Solar PV and onshore wind are now the cheapest sources of new-build generation for at least 2/3’s of the global population, according to the latest research conducted by BloombergNEF (BNEF).
Costs are even cheaper in the United States where best in class projects for wind can achieve a levelized cost of $26 a megawatt hour, excluding tax-credit subsidies. On average, onshore wind in the U.S. costs $37 a megawatt hour, a steep decline from being priced at over $100 a ten years ago. A decade ago solar was priced at more than $300 a megawatt hour.
“On current trends, the LCOE of best-in-class solar and wind projects will be pushing below $20/MWh this side of 2030. A decade ago, solar generation costs were well above $300, while onshore wind power hovered above $100/MWh. Today the best solar projects in Chile, the Middle-East and China, or wind projects in Brazil, the U.S. and India, can achieve less than $30/MWh. And there are plenty of innovations in the pipeline that will drive down costs further,” lead author of the BNEF report Tifenn Brandily noted.
The benchmark LCOE for battery storage is also dropping fast, it now stands at $150 a megawatt hour for four hour duration. This is half the price it was from just two years ago. Battery storage is now the cheapest new peaking power technology in countries that import gas, including Europe, China, and Japan.