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.

What is the least cost option for solar power?

Nevertheless, in terms of the LCOE of the median plant, onshore wind and utility scale solar PV are, assuming emission costs of USD 30/tCO 2, the least cost options. Natural gas CCGTs are followed by offshore wind, nuclear new build and, finally, coal.

Will the cost of capital increase in solar PV & wind markets?

In real terms (i.e. excluding the impact of inflation), the weighted average cost of capital (WACC) is expected to increase in most large solar PV and wind markets, excluding China. The higher cost of capital could offset most of the cost decreases resulting from lower commodity prices and further technology innovation in the next two years.

Why are electricity generation costs important?

Electricity generation costs are a fundamental part of energy market analysis, and a good understanding of these costs is important when analysing and designing policy to make progress towards net zero.

Are 'projected costs of generating electricity' falling?

The key insight of the 2020 edition of Projected Costs of Generating Electricity is that the levelised costs of electricity generation of low-carbon generation technologies are falling and are increasingly below the costs of conventional fossil fuel generation.

What happened to solar power in 2022?

In 2022, the global weighted average levelised cost of electricity (LCOE) from newly commissioned utility-scale solar photovoltaics (PV), onshore wind, concentrating solar power (CSP), bioenergy and geothermal energy all fell, despite rising materials and equipment costs.