While the cost of the more established renewable electricity sources is still falling, the decline is slowing down, and regional factors can still determine the most affordable mix of supply options in different parts of the United States, according to the latest in a series of annual cost analyses released by financial advisory firm Lazard.
“Solar and onshore wind remain cost-competitive with the marginal cost of existing conventional generation technologies,” Utility Dive reports, citing the analysis. “Costs for utility-scale solar have been falling about 13% annually for the last five years, while onshore wind costs have declined a more modest 7% annually.”
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Lazard also concludes that lithium-ion batteries “are cheapest compared to other technologies and chemistries thanks to improving efficiencies and a maturing supply chain,” the publication adds, particularly when they’re intended for short-term use.
The cost comparison shows onshore wind and utility-scale solar undercutting coal and nuclear generation when the renewables are subsidized, and unsubsidized wind beating conventional generation “under certain circumstances”, with regional differences in resource availability and fuel costs translating into a “meaningful variance” in competing technology costs.
But Lazard sees a practical solution to the concern that solar and wind are intermittent without storage to put them on a par with conventional grid systems. “Solar PV+storage systems are economically attractive for short-duration wholesale and commercial use cases, though they remain challenged for residential and longer-duration wholesale use cases,” the analysts wrote. The research pointed to “significant cost declines across most use cases, despite industry concern about rising costs for future deliveries of lithium-ion systems due to higher commodity pricing and challenges related to storage module availability.”