Prices for wind turbines, solar panels and other renewable energy equipment fell this year, but the declines were offset by higher financing costs in the wake of the global economic slowdown, the report explains.
Prices for all solar photovoltaic (PV) modules have continued their downward trend, although the rate of decline has tapered. Thin-film solar PV remains the low-cost leader in solar with projects as cheap as US$3/W, making thin-film products 25% less expensive than crystalline silicon on a levelised basis (lifetime cost per kWh before government subsidies).
“So far this year, the steady decline in the cost of equipment in sectors like solar and wind has been largely offset by the increasing costs of financing,” says Michael Liebreich of the London-based New Energy Finance.
“By the end of this year, however, as capital markets loosen up and equipment prices continue their decline, we will see the levelised costs decline, finishing the year 10% below the end of last year across the board, and far more than that in solar.”
Renewable energies wind and geothermal
Wind turbine prices have dropped to their lowest level in several years, declining 18% to 20% during this year, but this drop in equipment prices has been largely offset by higher costs of financing, the report notes. In the offshore market, costs continue to rise as projects move into deeper waters, facing increasingly complex construction and capital costs.
As capital markets begin to recover, both onshore and offshore wind projects should begin to see falling levelised costs, predicts the report.
The levelised cost for geothermal generation are particularly sensitive to fluctuations in capital markets and drilling debt, and drilling costs fell by 50% as drilling rigs became surplus with falling prices for oil. Drilling costs have recovered in the last quarter as oil prices rise, and costs increased 10% recently but should remain flat at the end of the year, it predicts.
New Energy Finance provides information and research to investors in renewable energy, low-carbon technology and the carbon markets. It operates across all sectors of renewables, including, wind, solar, biofuels, biomass, and energy efficiency. The company estimates a total investment of US$155 billion in clean energy last year.