RENEWABLE POWER GENERATION COSTS IN 2019

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RENEWABLE POWER GENERATION COSTS IN 2019 ( renewable-power-generation-costs-in-2019 )

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opportunity of improving cost structures towards best practice levels. Reducing the administrative hurdles associated with the permit or connection application process is a good example of a policy that can unlock cost reduction opportunities. As markets continue to mature, it is expected that some of the remaining cost differences among them will tend to decline. To track their development and be able to devise targeted policy changes that address remaining issues properly, a detailed understanding of individual cost components remains essential, however. The country average for the total installed costs of utility scale solar PV in these countries ranged from a low of USD 618/kW in India to a high of USD 2 117/kWin the Russian Federation in 2019. The highest cost average was about three-and-a-half times more than the lowest, despite the convergence of installed costs in major markets in recent years. On average, in 2019, BoS costs (excluding inverters) make up about 64% of total system costs in the countries in Figure 3.5. During 2016, they made up about half of the total system cost. This increased share highlights the increasing importance of BoS costs as module and inverter costs together continue to come down. In 2019, total BoS costs ranged from a low of 48% in India to a high of 76% in the Russian federation. Overall, soft cost categories for the evaluated countries made up around 40% of total BoS costs and about a quarter, on average, of the total installed costs. In 2016, these values were a third and 17% respectively. In the residential PV sector, since 2010, the declining cost trend in installed costs has also been visible in a wide range of countries. The residential, rooftop solar PV market has generally higher costs than utility-scale system due to their small-scale. Depending on the market, the total installed system costs (Table 3.1) decreased from between USD 4 277/kW and USD 7 756/kW in 2010 to between USD 840/kW and USD 4 096/kW in 2019 – a decline of between 47% and 80%. Since 2013, data for more markets beyond the early-adopter markets has also become available. Compared to Germany, long the benchmark for competitive small-scale systems, residential system costs since 2013 have generally remained within twice the German cost level (except for France in 2013 and the US markets). Since 2013, however, India has become the new benchmark for the lowest cost residential systems, although it has been joined by China in 2019. Costs since 2013 in the reported markets have been between two- and-a-half times and three times those of India, except in the US markets. There, they have been between three and five times higher. The total installed system costs in the commercial markets shown in Table 3.1 decreased from between USD 5405/kW and USD 8534/kW in 2010 to between USD 760/kW and USD 3 081/kW in 2019 (a decline of between 64% and 86%). Since 2017, more data has become available, as new markets have emerged. Between 2017 and 2019 commercial costs in the markets evaluated fell between 62% in China and 95% in the United Kingdom. Except for the American markets, during that period costs have not exceeded two-and-a-half times those in India in any other commercial market. CAPACITY FACTORS By year commissioned, the global weighted- average capacity factor19 for new utility-scale solar PV increased from 13.8% in 2010 to 18.0% in 2019. This was predominantly driven by the increased share of deployment in sunnier locations. After increasing steadily every year between 2010 and 2018, the capacity factor seems to be stabilising around the 18% mark (Table 3.2). The development of the global weighted-average capacity factor is a result of multiple elements working at the same time. Higher capacity factors in recent years have been driven by the shift in deployment to regions with higher irradiation, the increased use of tracking devices in the utility-scale segment in large markets and a range of other factors that have made a smaller contribution (e.g., reduction in system losses). Available data for the United States, especially, documents the increased use of trackers and their impact SOLAR PHOTOVOLTAICS 19 The capacity factor for PV in this chapter is reported as an AC/DC value. For other technologies in this report, the capacity factors are expressed in AC-to-AC terms. More detailed explanations of this can be found in: Bolinger and Weaver, 2014; Bolinger et al., 2015. 67

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