L R AS Published on Sunday 17 December 2023 - n° 470 - Categories:the prices

Photovoltaic LCOE is set to fall by around 20% between now and 2030

The European Photovoltaic Technology and Innovation Platform (ETIP PV) presents its discounted cost of electricity (LCOE) for several European sites between 2023 and 2050. The organisation predicts that the solar LCOE in Europe will

could be halved by 2050.

The LCOE of electricity produced by photovoltaics was analysed for five sites in Europe (Helsinki, Munich, Toulouse, Rome and Malaga) and four types of photovoltaic system (residential 5 kW, commercial 50 kW, industrial 1 MW and utility 100 MW).

The photovoltaic LCOE depends on the cost of production. It includes all the costs associated with supplying photovoltaic energy to the point of connection to the grid. It takes into account the investment (CAPEX) and operating (OPEX) costs of the photovoltaic system. OPEX includes the costs and profit margins of the entire value chain, including financing, project development, manufacturing, installation, operation and maintenance.

The main conclusions

According to the ETIP PV baseline scenario, cumulative global photovoltaic capacity would increase from 1.5 TW at the end of 2023, to around 5.5 TW by 2030, and then to 30 TW by 2050.

OPEX for large-scale solar power is expected to fall from €12.5 ($13.6)/W/year at the end of 2023 to €9/kW/year in 2050, while for rooftop solar power it is €10/kW/year. The CAPEX for the public sector is expected to rise from €0.46/W at the end of this year to €0.23/W in 2050, while for residential (5 kW), commercial (50 kW) and industrial (1 MW), prices could reach €0.81, €0.48 and €0.33 respectively. Taking all sectors together, CAPEX is cut by around half between January 2024 and 2050.

Compared with current values, the photovoltaic LCOE should fall by around 20% by 2030 and by 50% by 2050. Compared with average wholesale electricity prices from 2019 to 2021, large-scale photovoltaics would already be competitive with a nominal price. The weighted average cost of capital (WACC) is well above 10% in all countries.

The ETIP PV forecasts a fall in LCOE for all locations. The decline is particularly significant in Rome and Malaga. For example, in Malaga, the large-scale photovoltaic LCOE, with a nominal WACC of 7%, is €24/MWh in 2024, but is expected to fall to €19/MWh by 2030 and then to €13/MWh by 2050. The LCOE forecasts for all sites are very positive, indicating that PV electricity is already cheaper in all five sites with all realistic WACC rates and consumer segments.


PV Magazine 14 December 2023

Editor's note Forecasts are always difficult to make. Looking ahead to 2030, they can still be made with a large dose of room for error. To make one for 27 years ahead is nonsense.

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