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.

How much does solar energy cost?

Adding a conservative safety margin of 0.8 EUR cent/kWh on top of the 2.7 EUR cent /kWh results in an electricity price of 2.9 to 3.5 EUR cent/kWh after the 20-year financial payback period, depending on the actual solar radiation.

Are residential PV solar systems cheaper?

As shown in a growing number of countries, electricity production from residential PV solar systems can be cheaper than the variable part of residential electricity prices, depending on the actual electricity price and the local solar radiation level.

How much does PV electricity cost in Europe?

The same holds true for the variable part of the electricity price, which can vary between EUR 0.075 and 0.26 per kWh. Nevertheless, PV-generated electricity for the lower ROI financing options, which are more realistic for private consumers, is already cheaper for a large number of European Union citizens.

Does solar PV cost a government bond?

Both show negative solar PV premiums ranging from -2% to -2.7%, which means that we calculate a financing cost for solar PV that is below the financing cost for the government, i.e., a 10-year government bond. While there may be cases where this is plausible, it is unlikely for Brazil and China.

Can cost of capital be used to estimate power generation cost?

Results underline large country differences in cost of capital. The approach can complement but not replace other methods to estimate cost of capital. The cost of capital (CoC) is an important parameter for accurately calculating power generation cost, particularly for capital-intensive renewables such as solar PV.