The levelized cost of electricity for onshore wind and utility-scale solar fell 9% and 4%, respectively, across the globe over the last six months, according to an April 28 report by BloombergNEF, the energy research service of Bloomberg Inc.
Those resources are the cheapest form of newly built power generation for at least two-thirds of the population, the report found.
The global levelized cost of electricity, or LCOE, benchmark fell to $44/MWh for onshore wind and to $50/MWh for utility-scale solar. For battery storage, worldwide LCOE dropped to $150/MWh for systems with a four-hour duration, half what it was two years ago, according to the report.
Falling onshore wind costs are driven primarily by larger turbine sizes; turbines now average 4.1 MW, and onshore wind projects in the U.S. can now achieve $26/MWh, excluding taxes and subsidies.
"There have been dramatic improvements in the cost-competitiveness of solar and wind," Tifenn Brandily, lead author of the report, said in a news release. "Part of it is due to photovoltaic and wind technology getting better at extracting renewable resources."
Battery storage technology is evolving as well.
"Since 2018, increasing project sizes combined with a rapidly expanding manufacturing base and more energy dense chemistries, have halved the LCOE of energy storage," the report said.
The average onshore wind farm globally has doubled capacity since 2016, to 73 MW, according to the report. Solar farms average 27 MW in size globally, one-third larger than in 2016, while the average capacity for battery storage projects is 30 MWh, compared to 7 MWh four years ago.
The report predicted that the LCOE of the most efficient solar and wind projects will drop through the $20/MWh barrier globally by 2030.
The data does not reflect "what may happen to the LCOEs of different generation technologies as a result of the economic shock created by the coronavirus pandemic," the report said.
"The coronavirus will have a range of impacts on the relative cost of fossil and renewable electricity," said Seb Henbest, chief economist at BNEF. "One important question is what happens to the costs of finance over the short and medium terms. If sustained, this could help shield fossil fuel generation for a while from the cost onslaught from renewables."
A recent report by LevelTen Energy Inc. said renewable costs in the U.S. could rise due to the pandemic. The American Wind Energy Association has warned of reduced project financing availability for U.S. wind projects.