Costs of Renewable Energy Technology Options
Establishing definitive cost estimates for renewable energy technologies is a tricky business. The continued rapid evolution of technology, growth in annual production, maturing of the marketing and distribution networks, in-field learning, the site-specific nature of renewable energy resources, and financing costs all contribute to uncertainties in the delivered cost of energy. Different renewable technologies have different manufacturing constraints. Economies of scale play into lower cost wind turbines as machine size grows and multiple turbines are located in a geographically defined area. Economies of manufacturing and improved yield reduce the cost of solar electric (photovoltaic) modules. Resource exploration costs significantly impact the cost of geothermal power development. Environmental and social impacts can significantly delay and impact the cost of new hydroelectric facilities. The examples go on, and on.
Nevertheless, developing reasonable cost and performance estimates for specific projects is always necessary as feasibility studies progress, and to the extent that project economics affect project realization (as they always do), developing sound cost estimates is critical. From a project development perspective, future costs are irrelevant compared to the importance of current costs, but at the same time very few things in the energy business change overnight, delays are often encountered, and costs can change from year to year. The good news on the renewables side is that costs are only going one direction, down, so waiting for lower costs can be a strategy. On the fossil fuel side, costs are only going up due to resource depletion and environmental constraints. While the Age of Renewables is still ahead, cost effective deployments are happening today, at today's costs, competing directly with today's fossil energy costs. So like computers with ever increasing capability and ever lower costs, renewables will increasingly penetrate the market and provide cost effective services.
At the feasibility, and particularly at the development stage of a project, there is no substitute to getting specific cost quotes from specific vendors. The costs presented in the following sections are current distillations from many sources. While everything in renewables is site-specific, the numbers presented below represent the current situation and reasonable trends.
The cost information presented in this section has been extracted and reformatted from the National Renewable Energy Laboratory's Power Technologies Energy Data Book. The data book is an excellent source of consistent information on renewable energy technology status and future expectations.
Cost information is available for the following renewable energy sources: