New Wind And Solar Costs Will Keep Coming Down – Study

Berkeley Lab study projects continued long-term decline in the LCOE of utility-scale wind and solar

June 1, 2022 (Renewables Now)

“…Learning-by-doing is a broadly accepted concept for explaining relationships between technology cost reductions and cumulative output. It posits that costs decline as a function of output as firms learn to make products more efficiently, with the decline in cost per doubling of cumulative output known as the learning rate…[T]he learning rate can be applied to future output projections in order to estimate future costs…[But] the ultimate goal is to generate renewable energy…[and] installed cost is just one of a handful of inputs [that can benefit from learning, like] operating costs, financing costs, and capacity factor…

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…[T]he wind and solar industries have rightly focused on minimising LCOE, not installed costs…[A new method would] use LCOE, rather than installed costs, to assess historical learning…[It would] control for exogenous influences that are unrelated to learning…[and identify] periods of slower or faster learning…Wind’s full-period learning rate of 15% means that for each doubling of cumulative installed wind capacity worldwide, wind’s LCOE has declined by 15%. Solar’s full-period learning rate is higher, at 24%...[There were] two significant learning change points for wind (around 2006 and 2010), and one for solar (around 2014), with both technologies exhibiting a period of accelerated learning of 40-45% through 2020…

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…[It] is possible that wind’s accelerated learning rate from 2010-2020 is at least partly a correction to the period of negative learning witnessed from 2006-2010…[and suggests] that learning need not be constant over time, nor slow as industries mature…With its higher full-period learning rate of 24%, coupled with greater deployment projections, solar’s LCOE is expected to drop below wind’s LCOE within the next few years (from near-parity in 2020)—though there is greater uncertainty surrounding solar’s LCOE projection, given its briefer history…” click here for more

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