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Forecast of estimated LCOE generation by energy source 2025

Offshore wind energy generation is predicted to have one of the highest levelized capital cost of generation in the United States in 2025, at approximately 122.25 U.S. dollars per megawatt hour. Offshore wind power is still a relatively new technology in comparison to onshore wind, which is estimated to have levelized capital costs totaling 39.95 U.S. dollars per megawatt hour.

What are levelized capital costs?

The levelized cost of energy (or LCOE) is a comparative indication for the financial viability of different forms of energy over a system’s lifetime. Capital costs are the one-time expenses of acquiring the land, space, and construction resources to start a project, whereas running costs consider the maintenance of the energy system in operation. Among clean energy technologies, solar generation has experienced a greater increase than wind energy in the past decade, likely due to lower start-up costs.

Harvesting wind from the sea

Despite the higher capital costs of building wind turbines in bodies of water, high economic potential for fixed-bottom and floating offshore wind technologies is nevertheless predicted in the coasts off New England, especially in Maine and Massachusetts. Overall, levelized wholesale wind power prices in the United States have been decreasing since around the 2008 Recession, when investment in clean energy technologies increased.

Estimated levelized capital costs of energy generation in the U.S. in 2025, by energy system (in U.S. dollars per megawatt hour)*

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Source

Release date

February 2020

Region

United States

Survey time period

2020

Supplementary notes

* U.S. unweighted average levelized costs (2019 U.S. dollars per megawatt hour) for plants entering service in 2025, based on simple average of regional values.
** Costs are expressed in terms of net AC power available to the grid for the installed capacity.
*** According to the source, hydro is assumed to have seasonal storage so that it can be dispatched within a season, but overall operation is limited by resources available by site and season.

The abbreviation IGCC stands for integrated coal gasification combined cycle.
The abbreviation PV stands for photovoltaics.
The abbreviation EIA stands for U.S. Energy Information Administration.

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Statistics on "Energy production in the U.S."

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