The LCOE of global photovoltaic installed capacity in 2022 will drop by 3%
- Research has found that over the past decade or more, the cost of electricity (LCOE) of installed photovoltaic systems in some countries has dropped by 76% to 89%.
- The average cost of PV projects installed globally in 2022 is 4% lower than in 2021 and 83% lower than in 2010, the report said.
According to media reports, the International Renewable Energy Agency (IRENA) recently released a report on the global cost of photovoltaic systems installed in 2022. The global cost of electricity (LCOE) of photovoltaic systems installed in 2022 has dropped by 3%, from 2010 to 2010. by 89% in 2022. So far, this downward trend in costs appears to have extended into 2023, a finding that should come as no surprise to industry insiders.
According to the International Renewable Energy Agency (IRENA) report titled “Renewable Energy Generation Costs 2022”, in the past ten years or more, the cost of electricity for photovoltaic systems installed in some countries has dropped by 76%. ~89%. The weighted average cost of electricity for photovoltaic systems installed globally will drop from $0.445/kWh in 2020 to $0.049/kWh in 2022, which is about half of the cost of electricity for offshore wind power. The decline in the cost of photovoltaic systems has not only promoted the recovery of photovoltaic projects whose progress has stalled, but also provided new impetus for the global photovoltaic manufacturing industry, as countries around the world have seen the trend of continued growth in photovoltaic system installed capacity.
It is worth noting that between 2009 and 2022, the cost of polycrystalline silicon photovoltaic modules sold in Europe fell by 91%, and the average cost of electricity of optical systems installed in 2022 fell by 4% compared with 2021, and compared with 2010 year-on-year decrease of 83%.
The decline in the cost of photovoltaic systems was unexpected, as the decline in the cost of installing photovoltaic systems from 2010 to 2020 came to a sudden stop after the outbreak of the new crown epidemic. From 2020 to 2021, the installation cost of photovoltaic systems increased by 4% to 6%, reversing a long-term downward trend. This has left many EPC contractors and other PV system installers trapped in fixed-price contracts, making it difficult for them to achieve profitability at a lower cost, causing many companies to go out of business. In addition to mounting losses, orders have also dropped significantly.
The rising cost of photovoltaic systems was initially driven by high shipping costs and later by soaring polysilicon prices.
However, falling costs have led to a sharp rebound in some PV markets around the world, particularly in Europe and the United States, but also in emerging markets such as Latin America. In the US, operating and maintenance costs for PV systems have fallen by 58% from 2011 to 2021, to a low of $13/kW/year. This is comparable to O&M costs of US$10/kW/year in Europe and as low as US$9/kW/year for PV systems in Germany in 2017.
The report notes that there are significant regional differences in the trend of declining photovoltaic system costs. The cost of installed photovoltaic systems has fallen significantly in the Americas and the Middle East, while inflation in Asia and Europe has hindered the decline in installation costs.
The higher installed capacity means that the cost of installing photovoltaic systems in the UAE has fallen the most, with the installation cost of photovoltaic systems falling by 62% between 2021 and 2022. This was followed by Saudi Arabia and Chile, which saw declines of 35% and 22% respectively. At the same time, the average cost of photovoltaic systems installed in Asian and European countries rose, with Greece up 51%, Denmark up 36%, and France and Germany both up 34%.
Surprisingly, the cost of installed PV systems in China is also rising, increasing by 6% between 2021 and 2022. Given China’s dominance of the global PV industry, the risk of rising PV module costs spreading is much greater.
Francesco La Camera, Director General of the International Renewable Energy Agency (IRENA), said: “By 2030, the world must add an average of 1,000 GW of renewable energy generation facilities every year to keep the global temperature rise of 1.5°C within sustainable limits.” He It was highlighted that falling costs of installing and operating PV systems will help countries around the world more broadly achieve their long-term climate goals.
The International Renewable Energy Agency (IRENA) noted in a report that the cost of natural gas power generation tripled between 2010 and 2022, while the LCOE of photovoltaic systems fell by 89%. In contrast, the cost per unit of electricity for onshore wind fell by 69% and for offshore wind by 59%.
Globally, the cost of installed photovoltaic systems fell by 83% between 2010 and 2022, while other forms of renewable energy generation installations have also fallen dramatically. Globally, the cost of installed onshore wind and offshore wind fell by 42% and 34%, respectively, with only geothermal installations and hydroelectric installations seeing increases.
What this all means is that the demand for renewable energy generation is more attractive than before, and this increase in demand is unlikely to lead to significant price increases, thanks to the rapid growth of photovoltaic manufacturing capacity.