Levelized Cost of Renewable Energy in the Lower 48 United States: Blended Solar and Wind

Multiple analyses that present the wind and solar capacities across the United States have been published for decades. National Renewable Energy Laboratory’s (NREL) wind resource maps were first introduced by Pacific Northwest Laboratory in 1986 [1] and have been augmented more recently by studies from The University of Wyoming [2] and the National Resource Defense Council [3]. None of these studies, however, directly compare real levelized cost of electricity (LCOE) from wind and solar plants on a state by state basis. The purpose of this report is to provide a comparison of wind and solar energy costs to enable companies to make more informed location decisions based on renewable energy needs and specifically discuss New Mexico’s results.

The results presented in this report show that for a 50% solar/50% wind generation portfolio, New Mexico has the lowest cost of renewable electricity in the U.S. at the grid interconnection point, at 19.79% below the national average.

This study was commissioned by Agenda, LLC and RePower New Mexico, and conducted by KiloNewton. The study’s objective was to analyze solar and LCOE for favorable power plant sites located in each of the lower 48 contiguous states, to determine the lowest blended cost location for wind and solar electricity. For companies seeking the lowest cost 7 x 24 x 365 “always on” renewable electricity costs, a blended generation portfolio will typically provide the optimal solution.

Sites in each state were chosen using the National Solar Radiation Database (NSRDB) and NREL’s Wind Prospector. NREL’s System Advisor Model (SAM) software was used to model all sites for power production (PP) and costs. The validity of these PP results was confirmed using industry-leading software PVsyst and Openwind. The results correlated within 0.6% in high resource sites and 1.6% in all cases. Localized variables such as wind and solar production, land and labor costs, taxes, and environmental losses were included in the model to differentiate states’ LCOE, while commodity, BOS, and overall costs were constant and aligned to national averages.

In addition to ranking first in 50/50 mix, New Mexico ranked fourth in when considering weighted average of current generation capacity, at 16.78% below national average. New Mexico also appeared in the top five of every category considered in this study (all modeled LCOEs and PP). A summary table of the top five calculated LCOEs for each state is shown in Table 1.

In summary, this study shows that New Mexico consistently ranks as an ideal state to build solar and/or wind farms with the lowest LCOEs in the nation, and is the top contender with lowest LCOE for a 50/50 mix of combined solar and wind energy.

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