A new analysis shows that wind energy and solar power are more affordable than ever.
Every year, Lazard Associates publishes its Levelized Cost of Energy Analysis on different types of power plants including wind, solar, natural gas, coal, nuclear and other technologies. Some of the highlights of this new report include:
- Wind energy has reached record low prices. Wind energy has reached $32-$77 per megawatt hour (MWh) without federal incentives. If the federal Production Tax Credit or Investment Tax Credit is included, wind energy pricing may be $14-$63/MWh.
- Utility-scale solar power has reached record low prices. Solar power has reached $50-$70/MWh without federal incentives.
- Renewable energy costs have been steadily dropping for the past six years. Wind energy prices have dropped by 61% since 2009 and solar power prices have plummeted by 82%.
- Renewable energy is as cost-competitive as, or cheaper than, fossil fuels.While the analysis evaluated many forms of fossil fuel power generation, natural gas combined cycle power plants represent the lowest cost fossil fuel generation option. The levelized cost of energy from a gas combined cycle power plant ranges from $54-$78/MWh, using $3.50/MMBTU gas. Already, wind energy and solar power resources can compete or beat energy produced from combined cycle power plants burning natural gas; and those prices are fixed. Natural gas prices could be volatile, as they have been in the past.
Utilities across the Southeast are beginning to voluntarily purchase significant quantities of wind energy and solar power. Currently, utilities across the south can purchase wind energy that would reduce ratepayer costs. TVA recently announced a deal for a new 81 megawatt solar farm in Alabama at $61/MWh. New technology is enabling renewable energy development within the region. As prices continue to drop, more wind energy and solar power are assuredly in the works for the southeast.
