U.S. Renewable Energy Policy and Industry
LCOE ($/kWh)
How Are Developers Able to Bid so Low?
•
·
Current unsubsidized LCOE for PV projects across the United States is around $0.10-$0.11/kWh
However, federal and state subsidies still exist, and certain locations have lower labor costs and
better insolation
Additionally, developers typically bid PPAs based on where they think system costs will be
Some are also able to achieve lower cost financing with larger projects.
-
$0.12
$0.11
$0.10
$0.024
$0.08
$0.006
$0.022
$0.06
$0.04
$0.02
$0.003
$0.009
$0.006
$0.04
$0.00
•
•
Union labor •
($2.07/W)
Kansas City,
MO insolation
⚫ No subsidies
Las Vegas, NV
insolation
Non-union
labor
($1.89/W)
Federal
subsidy: 30%
ITC
•
State
subsidy: $3
REC at 2.4
multiple
•
Bid for future. Reduced
price of
$1.5/W
financing:
nominal
WACC 5.5%
from 7.0%
Sources: Current installed system price from Fu et al. (forthcoming). Economic Competitiveness of U.S. Utility-Scale Photovoltaics Systems in 2015:
Regional Cost Modeling of Installed Cost ($/W) and LCOE. Golden, CO: NREL. LCOE calculated using the System Advisory Model (SAM).
NATIONAL RENEWABLE ENERGY LABORATORY
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