Key findings of “Renewable Power Generation Costs in 2019” report by IRENA

Electricity costs from renewables have fallen sharply over the past decade, driven by improving technologies, economies of scale, increasingly competitive supply chains and growing developer experience. Newly installed renewable power capacity increasingly costs less than the cheapest power generation options based on fossil fuels. As a result, renewable power generation technologies are witnessing greater deployment in almost all parts of the world compared to conventional power plants. The year 2019 saw renewables accounting for 72 per cent of all new capacity additions worldwide.

In its latest report, “Renewable Power Generation Costs in 2019”, the International Renewable Energy Agency (IRENA) has presented the cost trends across renewable energy technologies to confirm how decisively the tables have turned in favour of renewables across the world. Presented below is the summary and key highlights of the report.


According to the report, one of the most dramatic dips was the cost of utility-scale solar power, for which the global weighted-average levelised cost of electricity (LCOE) fell 82 per cent between 2010 and 2019, while that of concentrating solar power (CSP) fell 47 per cent, onshore wind by 39 per cent and offshore wind at 29 per cent. The trend in the global weighted-average LCOE for the mature technologies of bioenergy for power, geothermal and hydropower has been more varied. These technologies represent competitive, firm power with already low costs in many cases.

Global weighted average LCOE from utility-scale renewable power generation technologies, 2010 and 2019 Note: This data is for the year of commissioning. The thick lines are the global weighted-average LCOE value derived from the individual plants commissioned in each year. The project-level LCOE is calculated with a real weighted average cost of capital (WACC) is 7.5 per cent for OECD countries and China and 10 per cent for the rest of the world. The single band represents the fossil fuel-fired power generation cost range, while the bands for each technology and year represent the 5th and 95th percentile bands for renewable projects

Utility-scale solar PV: This segment’s global weighted-average LCOE fell by a precipitous 82 per cent between 2010 and 2019, from a value of USD 0.378 per kWh in 2010 to USD 0.068 per kWh in 2019. This decline in LCOE was driven by the 90 per cent reduction in module prices between 2010 and 2019, which with declining balance-of-system (BoS) costs saw the global weighted-average total installed cost fall by 79 per cent over the same period. The global weighted-average total installed cost of projects commissioned in 2019 fell below the USD 1,000 per kW mark for the first time, to just USD 995 per kW, 18 per cent lower than in 2018.

India leads the world, in having the lowest weighted-average total installed costs of USD 618 per kW in 2019. Competitive cost structures are not confined to established markets anymore, however. Market growth in Ukraine and Viet Nam, for example, shows how PV continues to become a cost competitive technology choice in a growing number of settings. The weighted-average total installed cost in Ukraine in 2019 was USD 874 per kW, while it was USD 1,054 per kW in Vietnam. Significant country cost differences persist, however, and many markets could create significant cost reduction opportunities by moving to best practice cost structures.

The largest reduction in country-level weighted average LCOE between 2010 and 2019 also occurred in India, where costs declined by 85 per cent, to reach USD 0.045 per kWh in 2019 – a value 34 per cent lower than the global weighted average for that year. China and Spain achieved the next most competitive LCOEs in 2019, with weighted-average values of USD 0.054 per kWh and USD 0.056 per kWh respectively for 2019.

Residential and commercial sector rooftop solar PV: These projects typically have higher cost structures than utility-scale projects within a country. The LCOE of residential PV systems has, however, also experienced a steep reduction. Assuming a 5 per cent weighted average cost of capital (WACC) to allow for cheaper finance for homeowners, the LCOE of residential PV systems by country and market declined from between USD 0.301 per kWh and USD 0.455 per kWh in 2010 to between USD 0.063 per kWh and USD 0.265 per kWh in 2019 – a decline of between 42 per cent and 79 per cent by country per market. In 2019, the lowest country per market average LCOEs for commercial PV up to 500 kW could be found in India and China, at USD 0.062 per kWh and USD 0.064 per kWh, respectively. Between 2017 and 2019, the LCOEs in these markets fell 12 per cent and 26 per cent, respectively.

Onshore wind: The global weighted-average LCOE of onshore wind projects commissioned in 2019 fell to USD 0.053 per kWh, 9 per cent lower than in 2018 and 39 per cent lower than in 2010, when it was USD 0.086 per kWh. Onshore wind now consistently outcompetes even the cheapest fossil fuel-fired source of new electricity, as installed costs have fallen and capacity factors increased, while costs continue to edge lower. In 2019, the country-level weighted-average LCOE for new projects was lower than the cheapest fossil fuel-fired option in Argentina, Brazil, China, Egypt, Finland, India, Sweden and the United States. Falling prices for onshore wind turbines – down 55-60 per cent since 2010 – have reduced installed costs, while expanding hub heights and swept areas have boosted capacity factors at the same time as operation and maintenance (O&M) costs have fallen. The global weighted-average total installed cost of onshore wind farms thus declined by 5 per cent in 2019, year-on-year, falling from USD 1 549 per kW in 2018 to USD 1 473 per kW in 2019. Improvements in wind turbine technology have resulted in larger rotor diameters, swept blade areas, name plate capacities and hub-heights. This has driven an improvement in capacity factors that means today’s turbines harvest more electricity from the same resource than their predecessors. Between 2010 and 2019, the global weighted-average capacity factor for onshore wind increased by almost one-third, from just over 27 per cent in 2010 to 36 per cent in 2019.

Offshore wind: Its installed costs fell 18 per cent in 2010-2019, while its capacity factor improved by nearly one-fifth over the last decade (from 37 per cent in 2010 to 44 per cent in 2019). Operation and maintenance costs similarly fell with larger turbine sizes, expanded service capacities, and the emergence of cost synergies across growing maritime wind-farm zones. In 2019, the global weighted-average LCOE of offshore wind had fallen to USD 0.115 per kWh, from USD 0.161 per kWh in 2010. Recent auction results, including subsidy-free bids, however, herald a step-change in competitiveness for offshore wind in the 2020s, with electricity prices of between USD 0.05 and USD 0.10 per kWh about to become the norm.

Concentrating solar power: CSP’s installed costs have fallen in recent years with ongoing technological improvements and increased supply-chain competitiveness. The global weighted-average capacity factor improved from 30 per cent to 45 per cent between 2010 and 2019, with new CSP plants being built with improved technology, at better sites and in countries with more sunshine. The global weighted-average LCOE of CSP plants was around USD 0.35 per kWh between 2010 and 2012 but fell 47 per cent between 2010 and 2019. Recent auction and PPA results suggest the cost of electricity from CSP will fall into the USD 0.07 per kWh to USD 0.08 per kWh range. With its ability to provide dispatchable renewable power, CSP could therefore play an increasingly important role in facilitating ever-higher shares of variable solar PV and wind in areas with the direct solar resources to support CSP plants.

Hydropower: A mature, commercially attractive renewable power generation technology, hydropower is also uniquely placed to provide not only low-cost electricity, but also cheap electricity storage and large-scale flexibility services to the grid. Between 2018 and 2019, the global weighted-average total installed cost of hydropower projects rose from USD 1,435 per kW to USD 1,704 per kW. The global weighted-average LCOE of hydropower in 2019 was USD 0.047 per kWh – 6 per cent higher than in 2018 and 27 per cent higher than in 2010. Despite the increase in global weighted average LCOE since 2010, hydropower remains a competitive, low-cost source of electricity, with its global weighted-average LCOE still comfortably below the cheapest fossil fuel-fired source of new electricity generation.

Bioenergy: Where low-cost feedstocks are available – such as by-products from agricultural or forestry processes onsite – they can provide highly competitive, dispatchable electricity. For bioenergy projects newly commissioned in 2019, the global weighted-average total installed cost was USD 2,141 per kW, an increase on the 2018 weighted-average of USD 1,693 per kW. Capacity factors for bioenergy plants are driven by the availability of low-cost feedstocks. Between 2010 and 2019, the global weighted-average capacity factor for bioenergy projects varied between a low of 64 per cent in 2012 to a high of 86 per cent in 2017. Due to the heterogeneity of bioenergy feedstock and technology costs – and the typically higher technology costs in OECD countries – annual global weighted-averages are strongly influenced by the technology mix and geographical location of commissioned plants. Between 2010 and 2019, the global weighted-average LCOE of newly commissioned bioenergy plants has therefore ranged between a low of USD 0.055 per kWh in 2011 to a high of USD 0.082 per kWh in 2014, ending at USD 0.066 per kWh in 2019.

Geothermal power: Newly commissioned geothermal plants had a global weighted-average LCOE of USD 0.073 per kWh in 2019, up only slightly from the previous year and still broadly in line with costs since 2013, From then until 2019, the global weighted-average LCOE ranged between USD 0.06 per kWh and USD 0.07 per kWh for this mature technology which provides firm renewable electricity in areas with active geothermal resources. New capacity additions for this technology remain modest. The year 2019 saw record new capacity additions, but they totalled just 680 MW.


According to IRENA’s report, not only do costs continue to decline for solar and wind power technologies, but new projects are increasingly being commissioned at very low absolute cost levels. In 2019, 56 per cent of all newly commissioned utility-scale renewable power generation capacity provided electricity at a lower cost than the cheapest new fossil fuel-fired option. Nine-tenths of the newly commissioned hydropower capacity in 2019 cost less than the cheapest new fossil fuel-fired option, as did three-quarters of onshore wind capacity and two-fifths of utility-scale solar PV. The latter value is remarkable considering that in 2010, solar PV electricity cost 7.6 times the cheapest fossil fuel-fired option. Overall, these projects will save consumers in non-OECD countries alone, USD 1 billion per year.

Solar and wind cost reductions show no sign of abating, either. Data in the IRENA Auction and PPA Database indicate that solar PV projects that have won recent auction and power purchase agreements (PPAs) processes – and that will be commissioned in 2021 – could have an average price of just USD 0.039 per kWh. This represents a 42 per cent reduction compared to the global weighted-average LCOE of solar PV in 2019 and is more than one-fifth less than the cheapest fossil-fuel competitor, namely coal-fired plants.

The auction and PPA data indicate the price of electricity from onshore wind could fall to USD 0.043 per kWh by 2021, down 18 per cent from 2019. Offshore wind and CSP projects, meanwhile, are set for a step change, with their global average auction prices set to fall 29 per cent and 59 per cent from 2019 values, respectively. With its longer lead times, offshore wind will fall to USD 0.082 per kWh in 2023, while CSP will fall to USD 0.075 per kWh in 2021.

Global weighted average LCOE and auction/PPA prices for renewables versus fossil fuel power, 2010 to 2023
Note: The thick lines are the global weighted average LCOE, or auction values, by year. The grey bands that vary by year are cost per price range for the 5th and 95th percentiles of projects. For the LCOE data, the real WACC is 7.5 per cent for OECD countries and China, and 10 per cent for the rest of the world. The band that crosses the entire chart represents the fossil fuel-fired power generation cost range

With the global weighted-average LCOE of utility-scale solar PV and onshore wind potentially set to fall to USD 0.039 per kWh and USD 0.043 per kWh in 2021, new renewable power projects are cheaper than the marginal operating costs of an increasing number of existing coal-fired power plants, raising the risk of a growing number of stranded assets. Comparing these electricity costs to analysis by Carbon Tracker (Carbon Tracker, 2018) of the operating costs of over 2 000  GW of coal-fired power plants suggests 1 200  GW of coal-fired power plants may have higher operating costs than the average price of new utility-scale solar PV in 2021, while for the slightly higher average electricity price for onshore wind, it would be 850 GW of coal capacity.

Retiring the least competitive 500 GW of existing coal-fired plants and replacing them with solar PV and onshore wind would reduce system generation costs – and potentially also the costs passed on to consumers – by between USD 12  billion and USD 23 billion per year, depending on the evolution of coal prices and coal-fired power capacity factors in 2021. It would help reduce coal generation by around 2170 terawatt hours (TWh), reducing carbon dioxide emissions by 1.8 gigatonnes (Gt) of carbon dioxide (CO2) (5 per cent of global CO2 emissions in 2019). Further, the 500 GW coal replacement would yield a stimulus worth USD 940 billion over and above the past year’s solar PV and onshore wind deployment, or around 1 per cent of global GDP.

Outlook and the way forward

Solar and wind power have achieved impressive “learning rates” since 2010. Steadily rising deployment, technological refinements and growing developer and country experience have seen higher capacity factors and lower total installed costs over time.6 For the period 2010 to 2019, the LCOE learning rate was 36 per cent for solar PV, 23 per cent for CSP and onshore wind, and 10 per cent for offshore wind. Extending the period examined for CSP, onshore wind and utility-scale solar PV out to 2021, by including the global weighted-average electricity prices from the IRENA Auction and PPA Database, sees the learning rate for utility-scale solar PV increase to 40 per cent for the period 2010-2021. Over the same period, the CSP learning rate increases significantly to 38 per cent and that of onshore wind to 29 per cent. These learning rates represent quite remarkable rates of deflation for wind and solar power technologies, unrivalled by anything in our household budgets.

The same amount of money invested in renewable power today produces far more new capacity than it would have a decade ago. Renewable power generation capacity commissioned in 2010 – totalling 88 GW for the year worldwide – represented combined investments worth USD 210 billion in 2019 US dollars. Twice as much was commissioned in 2019 for USD  253 billion – only around one-fifth more in terms of investment value.

Read the full report here Renewable Power Generation Costs in 2019

Also see the interactive infographic on How Falling Costs Make Renewables a Cost-effective Investment