Utility-scale solar has reached another record low in Levelized Cost of Energy (LCOE), with a range between $0.028–0.041. That’s according to Lazard’s latest LCOE report, version 15.0 (h/t PV Magazine). Lazard found that renewables keep getting more and more cost-competitive with other forms of energy, most notably fossil fuels. Well, renewables are already cheaper than them, but the gap is growing.
The investment bank found that utility-scale solar has the lowest levelized cost of energy (LCOE) in the U.S. on average. This includes both thin-film solar and crystalline silicon solar. Onshore wind also has an incredibly low LCOE, including the lowest cost in the range-of-LCOE bars. Its LCOE range was determined to be $0.026–$0.050 per kWh, which is a little bit lower than last year’s $0.026–$0.054 per kWh.
The report noted that the LCOE of unsubsidized large-scale photovoltaic (PV) based on crystalline silicon was estimated at a range of $0.030–$0.042 per kWh, while thin-film solar plants were estimated at $0.028–$0.037 per kWh. Compared with Lazard’s 2020 report, these numbers are significantly lower, thus showing that the cost of utility-scale solar has continued to decrease significantly — for both major solar PV technologies.
The report included statistics for the LCOE for residential PV as well, which were $0.147–$0.221 per kWh. Commercial and industrial rooftop solar was a bit better, $0.067–$0.180 per kWh, and community solar even better, $0.059–$0.091 per kWh.
Utility-scale solar has a higher cost decline than onshore wind, and next year’s analysis could possibly show a wider cost decline. The report also noted that combined cycle gas has the lowest LCOE of $0.045–$0.074 per kWh among conventional sources, with coal and nuclear being at $0.065–$0.152 and $0.131–$0.204 per kWh, but this has long been the case.
Lazard stated, “When US government subsidies are included, the cost of onshore wind and utility-scale solar continues to be competitive with the marginal cost of coal, nuclear, and combined cycle gas generation.” That means that they are not just cheaper than new-build fossil plants, but that they are also cost-competitive with simply running/operating existing coal, fossil gas (aka “natural gas”), and nuclear power plants.
Lazard added that for the levelized cost of storage (LCOS) in the U.S. market, unsubsidized storage projects operating on the spot market with a capacity of 100 MW/100 MWh can deliver a value of $0.160–$0.279 per kWh. Facilities with a capacity of 100MW/200MWh and 100MW/400MWh could reach $0.146–$0.257 and $0.131–$0.232 per kWh.
The residential segment was also included, and solar-plus-storage installations in that segment could achieve $0.416–$0.621 per kWh. For the commercial segment, the value is estimated at $0.235–$0.335 per kWh.
In a nutshell, clean energy is winning.
Featured chart courtesy of Lazard.