Renewables have made great strides in recent years to bring down their costs and become competitive with traditional fuel sources.
The good news for renewables is that those costs are continuing to drop.
According to a recent report, the costs of some of the more established renewable energy sources are on a ten-year decline in the United States. They became cost competitive with existing conventional generation technologies several years and remain competitive.
International market-research firm, Lazard, released two reports in November. “Levelized Cost of Energy Analysis – Version 13.0”provides a comparative analysis of the levelized cost of energy (LCOE) for various generation technologies. The second report, “Levelized Cost of Storage Analysis – Version 5.0” includes a comparative levelized cost of storage analysis for various energy storage systems.
The study finds that regional differences in resource availability can account for major variations in the price of generation. However, the LCOE for onshore wind and utility-scale solar have decreased dramatically over the past ten years. Wind has dropped by 70%, and solar has declined by 89% during that time frame. Reduced cost of system components and improvements in efficiency have contributed to these declines.
Cost declines have somewhat leveled in recent years, although they are still dropping. According to the study, utility-scale solar has been averaging an annual rate of decline of about 13% for the past five years, while onshore wind costs have been averaging about a 7% annual rate of decline during the same time frame.
The second study also finds that storage costs, particularly for lithium-ion technology, have continued to decline faster than for alternate storage technologies. The study concludes that solar photovoltaic plus storage systems are attractive for short-duration wholesale and commercial uses, but residential and longer-duration wholesale projects continue to face challenges.