Analysis – Solar & Wind Market Cost of Energy (MCOE)

CohnReznick Capital has completed its midyear analysis of the Market Cost of Energy (MCOE) for 2022 through 2027 for wind and utility solar across six regions: CAISO, Southwest, ERCOT, PJM, MISO/SPP, and Southeast (solar only). The MCOE represents the year-1 $/MWh offtake rate for a 15-year utility-scale busbar PPA. While the Levelized Cost of Energy (LCOE) provides a good metric for net percent costs over the lifetime of a powerplant, the MCOE provides a market-based approach to determine the PPA price required to attain targeted investor returns.

In this edition, we see how an increase in CAPEX for renewables has caused MCOE prices to increase an average 33% for solar and 9% for wind across the country.