A study by the Fraunhofer Institute for Solar Energy Systems (ISE) on the electricity generation costs of various power plants in Germany has indicated that photovoltaic (PV) systems produce electricity at a cost lower than coal or gas-fired power plants, even in combination with battery storage.

According to the study, ground-mounted PV systems and onshore wind turbines, with costs of €0.041/kWh-€0.092/kWh, are the most cost-effective technologies in Germany, not only among renewable energy but also among all types of power projects.

The LCOE for PV systems ranges between €0.041 and €0.144/kWh, depending on the type of system and solar irradiation. System costs currently range between €700/kWp and €2,000/kWp and have mainly increased for small systems.

The analysis in Germany showed that the levelized cost of electricity for PV battery systems varies between €0.06/kWh and €0.22.5/kWh. The wide range is due to the vast cost differences for battery systems (€400/kWh to €1,000/kWh), cost variances for PV systems, and solar irradiation level where the systems are deployed.

“These calculations show that the large-scale projects currently being launched in Germany with a combination of ground-mounted PV systems, wind farms, and stationary battery energy storage are good investments,” Christoph Kost, Head of the Department for Energy System Analysis at Fraunhofer ISE and lead author of the study, said.

The report also projects the cost trends for the construction and operation of the systems up to 2045. In 2045, the LCOE for small rooftop solar systems will range between €0.049/kWh and €0.104/kWh and between €0.031/kWh and €0.05/kWh for ground-mounted PV systems. In 2045, the LCOE for large rooftop solar systems in Germany will be between €0.043/kWh and €0.087/kWh. By 2045, PV system prices are expected to fall to €457/kW and €588/kW for ground-mounted systems and to as low as €653/kW to €1306/kW for small systems.

The LCOE for PV-battery systems could be reduced by up to 30% by 2045. For small systems, the LCOE could be between €0.066/kWh and €0.191/kWh and €0.056/kWh to €0.14/kWh for large rooftop systems, and €0.043/kWh to €0.09/kWh for ground-mounted systems.

Even small PV battery systems could achieve electricity production costs between €0.07/kWh and €0.19/kWh by then, provided that the prices for battery storage systems fall to the assumed €180/kWh to €700/kWh, according to Verena Fluri, a researcher at Fraunhofer ISE and co-author of the study.

New wind onshore turbines built in 2045 could produce electricity at a cost of between 3.7 and 7.9 cents/kWh.

The study calculated the electricity generation costs for flexible operation, considering medium to low full load hours. The results indicate that the LCOE for biogas ranges from 20.2 to 32.5 cents/kWh. In contrast, solid biomass plants have a significantly lower LCOE, ranging between 11.5 and 23.5 cents/kWh.

The study shows that the LCOE for a hydrogen-powered combined-cycle gas turbine power plant built in 2030 was between 23.6 and 43.3 cents/kWh for highly flexible operation.

The electricity generation costs of flexible technologies are significantly higher than the costs of renewables, as CO₂ costs and the procurement of hydrogen are key cost drivers.

In June, a report by Lazard, an asset management and financial advisory company, found that the low ends of the LCOE for renewable energy technologies in the U.S. had increased for the first time, driven by persistent cost pressures such as high interest rates.

An earlier report by Lazard indicated that LCOE for onshore wind and utility-scale solar was competitive with conventional generation technologies, even without subsidies in some locations.