Lazard: Rooftop and large-scale PV experienced rapid price decline in 2016

Facebook
Twitter
LinkedIn
Reddit
Email
For the second year in a row, Lazard has reported that utility-scale PV generation is cheaper than any fossil fuel source. Source: Flickr/Max D

The levelised cost of rooftop and large-scale solar PV continued to rapidly decline in 2016, financial advisory and asset management firm Lazard has said.

In its annual report on the costs of electricity generation technologies, ‘LCOE 10.0’, the firm found that the costs for clean energy projects continue to decrease.

The analysis details that the cost of solar is falling faster than other forms of generation. Large-scale solar projects fell by 11% last year, and 85% since 2009, making solar competitive with natural gas power plants in some parts of the US – without even taking into account investment tax credits. Prices for 2016 sat between US$46 and US$61/MWh. This is the second consecutive year that Lazard has reported large-scale PV to be cheaper than any conventional energy source.

Rooftop PV fared even better; with costs down 26% in 2016, to US$138-US122/MWh, constituting the steepest cost decline out of any technology. However, Lazard noted that the overall yearly cost declines of alternative energy technologies were “less robust” than in previous years. Last year, utility-scale solar costs fell by 25% on average, while large-scale wind costs dropped 60% in 2015.

However, material declines in the price of systems components such as panels, inverters and racking etc. mean that wind and solar still remain increasingly cost-competitive with conventional generation technologies, and have been particularly so within the last seven years.

Overall, Lazard found that solar PV was competitive with gas and diesel-fuelled energy sources in many parts of the world due to high fuel costs, but could only be on par with the characteristics of conventional peaking technologies when paired with storage, due to its variable generation.

As has been seen, many industry participants are therefore starting to develop utility-scale wind and solar “plus storage” projects to ensure frequency regulation and consistent electricity flow into the grid that might not be possible through alternative energy sources alone.

Lazard asserts that for baseload generation in the future, advanced economies should combine existing conventional generation sources with alternative sources such as wind and solar for diverse generation methods.

The report concludes that cleaner sources of energy should be “complementary” to conventional generation technologies but are becoming increasingly prevalent through renewable portfolio standards (RPS) and emissions regulations.

27 September 2022
The demand for rooftop solar PV is soaring, driven by falling costs of the technology against energy crises that are gripping countries globally. But while an increasing number of households turn to solar to generate their own electricity, there is now a need for more specialist equipment, technologies and services to ensure the solar transition can reach as many customers as possible. Delivering these is now a major challenge for rooftop solar installers. This webinar will analyse the characteristics of the rooftop solar market, discussing how the products, logistics, installation and servicing of solar systems has evolved in line with consumer demands.
4 October 2022
Solar & Storage Finance USA, the only event that connects developers to capital and capital to solar and storage projects, will be back in November 2022.

Read Next

September 22, 2022
The RE+ tradeshow has been full of hope, excitement but also short-term questions as the industry considers the significance of the IRA.
September 22, 2022
Qcells has heightened its commitment to the global solar supply chain as its parent company, Hanwha Solutions, increases investment in clean raw materials.
September 22, 2022
Tech major Amazon has expanded its renewables portfolio globally with 71 new projects with a total capacity of 2.7GW.
September 22, 2022
Wood Mackenzie has repeated warnings that module supply shortages are set to persist until the end of 2023.
September 21, 2022
Cost certainty, reducing wait times and more flexible agreements with utilities are crucial to solving the US’ interconnections problems that are holding the country back from reaching its renewables targets
September 21, 2022
Under the REPowerEU scenario to install 750GWdc of solar across the European Union by 2030, the bloc will require 1 million solar workers, double the numbers from 2021.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)