Levelized capital costs of electricity generation in the U.S. by source 2026

Offshore wind has one of the highest levelized capital costs of any energy source in the United States. Newly erected offshore power generating sites entering the power grid in 2026 have estimated capital costs of 89.2 U.S. dollars per megawatt hour, as of 2020 calculations. The more difficult the initial construction of respective power plants the higher the capital costs.

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 off the Atlantic coast, particularly in New England. Overall, levelized wholesale wind power prices in the U.S. have been decreasing since the 2008 Recession. Unlike in Europe, U.S. investors and politicians have been relatively skeptical towards the establishment of offshore wind farms in the past, with only 30 megawatts installed in a single wind farm as of 2019. However the total U.S. offshore wind pipeline suggests more projects to come to fruition in the future.