In 2024, the global landscape of the Levelized Cost of Electricity (LCOE) continues to reflect significant advancements in renewable energy technologies, with wind and solar leading the way, according to the latest LCOE reports by Wood Mackenzie.

“In various regions, the cost competitiveness of these technologies varies significantly, but overall, renewables are on track to outpace traditional fossil fuel sources,” said Ahmed Jameel Abdullah, Senior Research Analyst at Wood Mackenzie.

For solar photovoltaic energy, the LCOE of fixed-axis systems averages $66/MWh globally, with a wide range from $28/MWh to $117/MWh, reflecting the influence of geography, technological advancements, and regional market conditions.

Single-axis tracking photovoltaic systems perform slightly better, averaging $60/MWh with a range from $31/MWh to $103/MWh, reinforcing their growing role in utility-scale projects.

Onshore wind technology has a global average LCOE of $75/MWh, ranging from $23/MWh to $139/MWh, demonstrating its competitiveness across various terrains and markets.

Offshore wind energy, particularly floating systems, remains expensive: fixed installations average $230/MWh, while floating systems average $320/MWh. These costs are expected to decline over time but remain higher than onshore options.

Los informes de Wood Mackenzie cubren las regiones de Europa, América del Norte, América Latina, Asia Pacífico y Oriente Medio y África.

Asia-Pacific (APAC)

In 2024, the LCOE for renewable technologies like wind and solar in APAC decreased by 16%, driven by a 21% reduction in capital costs. Solar photovoltaic energy remains the cheapest generation option in the region, with competitive pressure leading to significant project cost reductions.

Distributed photovoltaic energy also experienced a 33% cost reduction, reflecting market competition and improved module efficiency for technologies like TOPCon and HJT. However, offshore wind remains a premium technology, with cost competitiveness largely limited to China. Other markets face high capital expenses due to ongoing inflationary and supply chain pressures.

Europe

In Europe, the average LCOE for renewables modestly declined by 0.2%, despite a 9% reduction in installation costs between 2020 and 2023. Financial challenges in project funding offset the cost decreases.

Utility-scale solar photovoltaic energy in Southern Europe leads the market, benefiting from significant capital cost reductions and achieving the lowest LCOE in the region.

By 2060, renewable technologies could be up to 85% cheaper than fossil fuels, while sustained investment in low-carbon dispatchable technologies remains crucial to ensuring grid stability as renewables expand.

North America

The 2024 North American LCOE report highlights significant cost reductions for renewable technologies, with wind and solar at the forefront. The LCOE for renewables decreased by 4.6%, supported by a 4.2% reduction in capital costs.

By 2060, utility-scale solar is expected to see a 60% reduction in LCOE, driven by advancements in cell technology and increased capacity for producing key components like polysilicon.

Onshore wind in the U.S. is projected to experience a 42% LCOE reduction, emphasizing the long-term competitiveness of renewables in the region. Offshore wind, while facing short-term cost pressures, is expected to achieve a significant LCOE reduction of up to 67% by 2060, underscoring its growing role in the future energy mix.

Latin America

In 2024, the average LCOE for renewables in Latin America decreased by 8%, driven by easing supply chain pressures and lower capital costs.

Single-axis solar photovoltaic systems now have the region’s lowest LCOE, particularly in mature markets like Brazil, Chile, and Mexico. By 2060, renewables are expected to have a 70% cost advantage over fossil fuels, highlighting their growing competitiveness.

As a result, Brazil and Mexico are poised to see increased commercial market opportunities, as declining solar and wind costs outpace electricity prices, creating significant revenue potential.

Middle East and Africa (MEA)

In 2024, the Middle East and Africa (MEA) region saw a notable reduction in the LCOE for solar and wind projects, driven by a 13% decrease in capital costs per kW. This decrease, facilitated by supply chain stabilization, underscores solar photovoltaic energy as the most cost-effective power source in the region.

Saudi Arabia and the UAE, benefiting from high solar irradiation, make single-axis tracking photovoltaic energy the most attractive option for developers, achieving a competitive LCOE of $19.7/MWh by 2060.

“These results highlight the growing competitiveness of renewable energy technologies worldwide, with significant cost reductions projected across all regions by 2060,” stated Abdullah. “The rapid cost declines underscore not only the increasing competitiveness of renewables but also their potential to fundamentally reshape energy markets, economies, and even geopolitics.”

As renewable technologies mature and scale, the energy generation landscape will shift decisively toward sustainability, efficiency, and resilience.

“The coming decade will not only see the decline of fossil fuel dominance but also the rise of unprecedented innovation in how energy is generated, stored, and distributed, creating a future where energy is not only cheaper but also more accessible and adaptable. The implications for industries, policymakers, and communities are profound, setting the stage for new leadership in the global energy transition,” concluded Abdullah.