Levelized cost of energy in the U.S. 2021, by source

Rooftop solar photovoltaic installations on residential buildings have the highest unsubsidized levelized costs of energy generation in the United States. If not for federal and state subsidies, rooftop solar PV would come with a price tag between 147 and 221 U.S. dollars per megawatt hour. These pricing estimates are based on underlying assumptions of 60 percent debt made with eight percent interest rate and 40 percent equity at 12 percent cost for all energy generation types. Rooftop installations have a higher levelized cost range due to their relatively small capacity when compared with utility-scale power plant facilities. Globally, the rooftop share in solar PV deployment is forecasted to reach 31 percent in 2021.

LCOE for solar PV

Levelized cost of electricity or energy generation (LCOE) is a measure used to compare cost efficiency of different electricity generating technologies. It describes the average expense of building and maintaining a power plant divided by its total power output over the facility’s lifetime. The global levelized cost of electricity for utility scale solar PV ranges between 30 and 180 U.S. dollars per megawatt hour. The economic viability of solar PV installations is dependent on a variety of factors largely centering around topography and the predominant weather pattern at the installation site. In regions with high sunshine duration, installing solar PV would come with lower LCOE’s as electricity production may be higher. As countries may stretch across highly variable topography and even across climate zones, solar PV LCOE may also vary greatly within a country. The U.S. has some of the lowest LCOE’s for utility-scale solar PV, at 28 to 108 U.S. dollars per megawatt hour.

Capital costs by energy technology

In terms of capital costs – the one-time expense arising from the purchase of land, construction material, and building of the power plant – for new power plants expected to come live in 2026. Offshore wind power is the most expensive, with an estimated levelized capital costs of roughly 89 U.S. dollars per megawatt hour. Capital costs for solar PV are comparatively low.