Use a common basis before comparing technologies. For a first-pass cost comparison, the latest global weighted averages from the International Renewable Energy Agency (IRENA) put new offshore wind commissioned in 2025 at USD 78/MWh, versus USD 33/MWh for onshore wind and USD 44/MWh for solar photovoltaic (PV). Those figures are useful benchmarks, not quotations for a particular project. A sound comparison also tests hourly output, dependable capacity, transmission, curtailment, financing, environmental effects and the purpose of the decision.
Decide what question the comparison must answer
“Which renewable source is cheapest?” is not one question. The answer changes depending on whether you are screening technologies, choosing a procurement contract or designing a reliable, low-carbon portfolio.
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New-build generation cost
If the question is the lifetime cost of electricity from a new plant, compare levelised cost of electricity (LCOE) for projects commissioned in the same period. LCOE combines capital expenditure, financing, operations and maintenance, fuel where applicable, decommissioning assumptions and the electricity expected over the plant’s life. It is a consistent starting point, but it does not say when electricity arrives, where it is delivered or what balancing and network costs it creates.
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An auction award or power-purchase agreement (PPA) is a commercial result, not an interchangeable technology statistic. Contract length, indexation, construction risk, curtailment rules, tax treatment, seabed leases, transmission responsibility and the buyer’s credit can move the price far from a global LCOE average.
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Least-cost portfolio or grid value
A system planner asks how a resource works with existing generators, storage, demand response and transmission. A plant with a higher LCOE can still be valuable if its output arrives when the grid is short of power or if it diversifies weather risk. Conversely, a low-cost plant can have lower net value in a congested area or during hours when many generators produce simultaneously.
Put every technology on the same basis
Before collecting numbers, write down the comparison boundary. The following fields prevent most misleading “apples-to-oranges” results.
| Input to align | What to specify | Why it changes the result |
|---|---|---|
| Commissioning year and price year | For example, projects commissioned in 2025 and costs expressed in 2025 U.S. dollars | Equipment, interest rates, inflation and supply chains change over time. |
| Geography | Global, national, regional or a named market | Wind resource, solar irradiation, water conditions, wages, permitting and grid costs are local. |
| Technology definition | Fixed-bottom or floating offshore wind; utility-scale or distributed PV; reservoir or run-of-river hydro | Different configurations have different construction and operating costs. |
| Project scale | Utility-scale plant, commercial project or household system | Scale changes procurement, financing and connection costs. |
| Currency and inflation basis | Nominal or real currency, exchange-rate date and price year | A currency conversion without a price-year adjustment can create a false advantage. |
| Cost metric | LCOE, installed cost, auction price, PPA strike price or total system cost | These metrics answer different questions and cannot be ranked as if they were identical. |
| Project boundary | Generation plant only, or plant plus spur line, shared transmission, storage and balancing | Leaving connection or system costs outside the boundary can favor a resource located near an existing grid. |
IRENA’s cost annex explains its definitions, assumptions and LCOE method. Use those notes when reproducing a figure rather than combining values from different editions without labeling the year.
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Use the latest global cost benchmark carefully
IRENA’s July 2026 report, covering projects commissioned in 2025, reports these global weighted-average generation costs:
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| Renewable technology | Global weighted-average cost (USD/MWh) | What the figure represents |
|---|---|---|
| Onshore wind | 33 | New projects commissioned in 2025 |
| Solar PV | 44 | New projects commissioned in 2025 |
| Hydropower | 62 | New projects commissioned in 2025 |
| Offshore wind | 78 | New projects commissioned in 2025 |
| Bioenergy | 86 | New projects commissioned in 2025 |
| Geothermal | 89 | New projects commissioned in 2025 |
| Concentrating solar power | 115 | New projects commissioned in 2025 |
On this common global benchmark, offshore wind costs about USD 45/MWh more than onshore wind and USD 34/MWh more than solar PV. Those differences describe the weighted set of projects in the report; they do not predict an individual site’s bid. Offshore construction, specialized vessels, subsea cables and marine operations can raise costs, while a strong offshore wind resource and larger turbines can improve energy production. Local financing and transmission can reverse the ranking.
IRENA also reports that more than 90% of utility-scale renewable projects commissioned in 2025 delivered electricity below the cost of the cheapest new fossil-fuel plant in their market. That comparison uses the report’s specified market and fossil-plant definition; it is not a claim that every renewable project is cheaper in every location.
Do not blend different IRENA editions silently
IRENA’s 2024 report, published in July 2025, gives earlier global weighted-average LCOEs of USD 34/MWh for onshore wind, USD 43/MWh for solar PV and USD 57/MWh for hydropower. They describe newly commissioned utility-scale projects in 2024, not the 2025 values above. A chart can show both years, but label each year and avoid treating a change as a technology trend without examining the project mix, financing and assumptions.
Understand what LCOE leaves out
LCOE is a lifetime generation-cost metric. It divides the discounted costs assigned to a plant by its discounted electricity production. The result depends on the discount rate, construction schedule, operating life, capacity factor, maintenance profile and other assumptions. Changing the financing assumption alone can materially change the ranking.
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- Introduction to Renewable Energy (Energy and the Environment)
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- CRC Press
LCOE does not measure the market price received in each hour, the cost of a new transmission line, congestion, curtailment, backup, storage or the value of avoiding emissions and fuel-price exposure. It also does not tell you whether the plant contributes during a system peak. Present LCOE as one column in a decision, not as a complete measure of societal or grid value.
Compare output, capacity factor and dependable capacity separately
Capacity factor is an average, not a guarantee
Capacity factor is the electricity produced over a period divided by the electricity a plant would produce if it ran at full nameplate output throughout that period. It helps explain how much energy a project generates from its hardware, but it does not identify the hours of production or the amount available during a reliability event.
Wind output changes with wind conditions; solar output follows daylight and weather; hydropower depends on water inflows and reservoir operation; geothermal and some bioenergy plants can be scheduled more continuously, subject to their own resource and operating limits. Compare hourly or sub-hourly profiles when the decision concerns reliability, storage or market exposure.
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Capacity credit estimates how much dependable contribution a resource makes to meeting peak demand. It is not the same as capacity factor. A U.S. Department of Energy study of a modeled future northeastern U.S. grid found offshore-wind capacity credit ranging from 14.5% to 28.3% across its scenarios. That is a regional, scenario-specific result, not a universal offshore-wind value. The study also found that location and transmission conditions affected the result.
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For your project, calculate or obtain a capacity-accreditation result for the relevant weather years, demand pattern, neighboring markets and transmission limits. Do not copy a capacity-credit percentage from another region into a procurement document.
Separate a project’s price from its value to the system
A face-value auction or PPA comparison can mislead when contracts allocate risks differently. A more complete assessment asks what revenue the project can earn and what costs or benefits it creates elsewhere in the system.
- Location: A remote offshore project may need export cables, onshore reinforcement or a new landing point. A cheaper plant in a constrained zone can produce more congestion.
- Timing: Compare the project’s hourly output with demand, scarcity hours and the production of other renewables. Annual megawatt-hours alone hide these interactions.
- Curtailment: Estimate energy that cannot be delivered because the network or market has no capacity. State whether the project or the system bears the resulting revenue loss.
- Transmission: Include radial connection, shared offshore networks and upgrades required to move power to load centers, using the same boundary for every technology.
- Balancing and flexibility: Examine reserve, ramping, storage or demand-response needs created by the combined portfolio, rather than assigning a generic “backup cost” to one technology.
- Revenue exposure: Model market prices, contract floors, congestion and capture-price effects. A project’s annual average price can differ from the market average if it produces during low-price hours.
The Department of Energy’s “Turning Oranges to Apples” guidance recommends a holistic revenue and value assessment instead of relying only on headline contract prices. Apply that principle even when comparing technologies before a specific contract exists.
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An interconnected grid balances supply and demand continuously. Variability from wind and solar is managed through geographic diversity, forecasting, dispatchable resources, storage, interconnection and demand flexibility. The practical effect depends on the existing generation mix and network topology.
Two offshore projects with the same LCOE can have different system value if one is near a load center and the other sits behind a congested interface. Similarly, combining wind regions with different weather patterns can smooth aggregate output. Use production time series and a dispatch or capacity-expansion model when the investment is large enough to affect network planning.
Report the assumptions that matter: weather years, demand growth, neighboring-market imports, transmission build-out, storage duration, reserve rules and curtailment treatment. If you only have annual data, label the result as a screening comparison rather than a reliability conclusion.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Include siting and environmental effects without generalizing
Environmental effects are site- and species-specific. The Department of Energy’s environmental and wildlife guidance emphasizes evaluating location, species, construction methods, operation and mitigation together.
Offshore wind pathways to examine
- Seabed disturbance and underwater noise during foundation or cable installation.
- Changes to marine habitat, benthic communities and vessel traffic during construction and maintenance.
- Potential interactions with birds, bats, marine mammals, fish and fisheries, varying by route and season.
- Electromagnetic fields, cable burial and habitat recovery at the project-specific scale.
- Visual, navigation, cultural-resource and commercial-fishing effects where relevant.
Compare mitigation, not just impact categories
Record survey requirements, seasonal construction windows, turbine or vessel operating measures, cable-burial standards, monitoring plans, adaptive management and decommissioning obligations. A general agency description is not evidence that every project will affect every species in the same way. Apply the same level of site-specific scrutiny to dams, geothermal wells, biomass feedstocks, solar fields and land-based wind facilities.
A repeatable comparison workflow
- State the decision. Write whether you are screening new generation, evaluating a PPA, selecting a portfolio or testing reliability.
- Set the boundary. Define plant, connection, shared transmission, storage, balancing and environmental costs to include.
- Lock the data year and geography. Use one commissioning period and one currency basis for the headline comparison. Keep older editions in a separate, clearly labeled series.
- Define each technology. Specify offshore foundation type, turbine scale, PV category, hydropower design and other assumptions that affect cost and output.
- Collect a consistent LCOE set. Use one methodology where possible. Record discount rate, lifetime, capacity-factor assumption, financing treatment and whether costs are real or nominal.
- Normalize commercial prices. For an auction or PPA, document contract duration, escalation, subsidies, delivery point, curtailment compensation and who pays for transmission. Do not place that price in an LCOE table without explaining the difference.
- Add hourly production. Use representative weather years and demand data. Calculate annual energy, seasonal shape, correlation with demand and coincident output with the rest of the portfolio.
- Model grid effects. Estimate congestion, curtailment, connection upgrades, reserves, storage and capacity credit for the actual region. Test alternative transmission and build-out cases.
- Assess environmental and permitting risk. Map habitats, species, fisheries, water use, land or seabed conflicts, survey requirements, mitigation and monitoring obligations.
- Run sensitivities. Vary financing cost, construction delay, capacity factor, commodity prices, transmission availability, curtailment and carbon or fuel-price assumptions.
- Report a decision-ready result. Show the headline generation cost, system-adjusted cost or value, reliability contribution, key environmental conditions and the assumptions that could change the ranking.
Use a technology profile, not a single leaderboard
| Technology | 2025 global weighted-average cost | Questions beyond LCOE |
|---|---|---|
| Offshore wind | USD 78/MWh | Export and onshore transmission, marine construction, seabed and wildlife effects, hourly wind profile, capacity credit and port or vessel availability. |
| Onshore wind | USD 33/MWh | Land access, public acceptance, transmission, wake effects, weather correlation and local capacity accreditation. |
| Solar PV | USD 44/MWh | Daylight-only production, seasonal mismatch, land or rooftop constraints, storage and midday curtailment. |
| Hydropower | USD 62/MWh | Hydrology, reservoir flexibility, drought, aquatic ecosystems, inundation and permitting. |
| Geothermal | USD 89/MWh | Resource confirmation, drilling risk, reservoir management, induced seismicity controls and location near demand. |
| Bioenergy | USD 86/MWh | Feedstock availability, transport, sustainability, emissions accounting and dispatchability. |
| Concentrating solar power | USD 115/MWh | Direct normal irradiance, thermal storage, water use, land and transmission. |
The costs in this table are IRENA’s global weighted averages for new projects commissioned in 2025. They are not bids for a common site, and they do not include a universal adjustment for grid value or environmental effects.
Common comparison mistakes and their fixes
- Mixing years: Fix it by separating the 2024 and 2025 IRENA series and stating the commissioning year in every chart.
- Calling LCOE a retail price: Fix it by labeling LCOE as a generation-cost metric and showing contract, network and market assumptions separately.
- Treating capacity factor as reliability: Fix it with hourly profiles and a region-specific capacity-credit study.
- Using a global average to price a local project: Fix it with site resource, financing, construction, transmission and permitting data.
- Adding an arbitrary backup penalty: Fix it with a system model that allows the portfolio, storage, reserves and transmission to respond together.
- Ignoring curtailment: Fix it by reporting gross generation, delivered generation and the rule used to allocate curtailed energy.
- Generalizing environmental effects: Fix it by tying each pathway to the location, species, construction method, mitigation and monitoring plan.
- Comparing unlike commercial offers: Fix it by normalizing delivery point, contract term, escalation, subsidies, risk allocation and transmission responsibility.
How to present the final result
A useful public comparison can fit on one page if its scope is explicit. Put the common-year LCOE table first, then add a second table for system-adjusted measures such as delivered energy, capacity credit, curtailment, transmission requirement and environmental conditions. Include a short sensitivity chart showing which assumptions change the ranking.
For the latest global screen, offshore wind is more expensive on average than onshore wind and solar PV in the 2025 IRENA data. That is a generation-cost observation, not a universal investment verdict. The defensible conclusion for a particular grid comes only after matching output to demand, pricing transmission and curtailment, testing dependable capacity and documenting site-specific environmental requirements.
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