For WoodMac, the global average LCOE of photovoltaic (PV) reaches €55.5/MWh in 2024, compared to €40/MWh according to IRENA for 2023

The levelized cost of electricity (LCOE) of solar photovoltaic (PV) has continued to decline worldwide in 2024, according to the latest report by consultancy Wood Mackenzie.

The global average LCOE of fixed solar photovoltaic (PV) systems in 2024 reached $66/MWh (€61/MWh), with a range between $28/MWh and $117/MWh (€26/MWh and €108/MWh). The price difference is affected by the location of the project – there are more areas of the world than ever before with solar PV – technological advances and regional market conditions.

IRENA

Single-axis tracking systems, on the other hand, have a slightly lower average LCOE of $60/MWh (€55.5/MWh), ranging from $31/MWh to $103/MWh.

For comparison, according to a report from the International Renewable Energy Agency (IRENA) in late September, the global average solar LCOE stood at $0.044/kWh in 2023 (€0.040/kWh), lower than WoodMac estimates for 2024, although the consultancy concludes that it has fallen this year. IRENA says the result represents a 12% year-on-year decline and a 90% decline since the beginning of 2010. Another Fraunhofer ISE report released this October shows that the LCOE for solar in Germany currently ranges from €0.041/kWh to €0.144/kWh ($0.044/kWh to $0.155/kWh) and from €700/kWh to €2,000/kWh. The study also shows that the levelized cost of solar plus storage ranges from €0.06/kWh to €0.225/kWh.

Back to WoodMac, across all the regions analysed for its report, the smallest decline in LCOE has been in Europe, with the average LCOE for renewables falling by 0.2%. However, utility-scale solar PV in Southern Europe has the lowest LCOE.

Latin America’s average LCOE fell by 8%, driven by easing supply chain pressures and falling capital costs. Solar PV has the lowest LCOE in mature markets such as Brazil, Chile and Mexico. By 2060, renewables are projected to have a 70% cost advantage over fossil fuels in the region.

In 2024, North America’s LCOE fell by 4.6% due to a 4.2% decline in capital costs.

In 2024, the LCOE of renewable technologies such as wind and solar in Asia-Pacific fell by 16%, driven by a 21% drop in capital costs. PV remains the cheapest generation option in the region, with competitive pressure leading to significant reductions in project costs.

Finally, in the Middle East and Africa, the average LCOE fell by 13% in 2024, mainly due to the stabilization of supply chains, while placing solar PV as the most cost-effective energy source for the region.

Single-axis solar PV systems are the most attractive technology for developers in countries such as Saudi Arabia and the United Arab Emirates, with the LCOE set to reach $19.7/MWh in 2060.

According to Amhed Jameel Abdullah, Principal Research Analyst at Wood Mackenzie, “The cost competitiveness of these technologies varies greatly from region to region, but in general, renewables are gaining ground in the region.”