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The International Renewable Energy Agency (IRENA) says the figure represents a year-on-year decline of 12%. The figure has fallen by 90% since the beginning of 2010. The globalized weighted average levelized cost of electricity (LCOE) from utility-scale solar plants stood at $0.044/kWh in 2023, according to a report by the International Renewable Energy Agency (IRENA). The report notes that the result represents a 12% year-over-year decline, compared with a 3% year-over-year decline between 2021 and 2022. In 2010, the figure stood at $0.460/kWh, meaning the weighted average LCOE has fallen by 90% since the start of the last decade. The IRENA report says the “remarkable, sustained and dramatic decline is one of the most compelling stories of the evolution of the power generation sector over the past decade.” It attributes this decline to rapidly falling installation costs, rising capacity factors and declining operation and maintenance (O&M) costs. Falling solar module costs are believed to have contributed 45% to the reduction in the LCOE of utility-scale PV since 2010, while inverters are believed to have contributed another 9%. Racks, mounting and other equipment contributed another 9%. According to IRENA, engineering, procurement and construction, installation and development and other indirect costs were responsible for 28% of the LCOE decline, while the remainder of the reduction was attributed to improved financing conditions as markets have matured, lower operation and maintenance costs and an increase in the global weighted average capacity factor, driven by the shift to sunnier markets. Analysis of selected countries for which historical data is available shows that the weighted average LCOE of utility-scale solar decreased between 2010 and 2023 by between 76%, as observed in the US, and 93%, as observed in Australia and the Republic of Korea. The lowest weighted average LCOE in 2023 were recorded in Australia ($0.034/kWh) and China ($0.036/kWh), the latter down 14% year-on-year. The US recorded a weighted average LCOE of $0.057/kWh for solar in 2023, down 3% year-over-year and 33% above the global weighted average. The Netherlands saw the largest year-over-year decline last year, recording $0.059/kWh in 2023, a 35% drop. India’s LCOE increased by 26% in 2023 to $0.048/kWh, which IRENA said was the fourth most competitive cost for the year. Greece recorded the largest LCOE increase of the countries surveyed at 42%, followed by Canada (36%) and Germany (28%). The IRENA report also highlights that the cost of crystalline solar PV modules sold in Europe fell by 93% between December 2009 and December 2023. Meanwhile, the global capacity weighted average of the total installed cost of projects commissioned in 2023 stood at $758/kW, 86% lower than in 2010 and 17% lower than in 2022. IRENA also found that the global weighted average capacity factor for new utility-scale solar PV increased from 13.8% in 2010 to 16.2% in 2023. “This shift is the result of the combined effect of evolving inverter load ratios, a change in average market irradiance, and increased use of trackers – largely driven by increased adoption of bifacial technologies – unlocking the use of solar PV at more latitudes,” the report says. |
