The cost of generating electricity from all forms of renewable energy continues to decline, according to the latest Levelized Cost of Energy Analysis (LCOE 9.0) – Lazard's annual study comparing the cost of generating energy from conventional and alternative technologies.
Highlights from the study include:
Despite recent sharp declines in the market price of natural gas, utility-scale solar and wind power remain cost-competitive complements to traditional generation technologies, even without subsidies.
The median average cost of generating electricity from utility-scale photovoltaic (PV) technology has declined about 25% from one year ago.
Rooftop solar PV technology is still not cost competitive without significant subsidies, primarily due to higher installation costs. However, the levelized cost of rooftop solar PV is expected to decline in coming years, primarily as a result of more efficient installation techniques, lower costs of capital and improved supply chains.
Even though alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the baseload generation needs of a developed economy for the foreseeable future. Therefore, the optimal solution for many regions of the world is to use complementary traditional and alternative energy resources in a diversified generation fleet.