Inside the numbers: How LCOE is reshaping global power economics

Renewable prices are falling, despite policy and geopolitical headwinds around the globe. Wood Mackenzie recently published the findings of its latest analysis on the development of the levelised cost of electricity (LCOE) across Europe, Asia Pacific, North America and Latin America, extending its projections out to 2060.  

Our analysis provides a comprehensive commentary on the competitiveness of numerous technologies, assessing their viability in each market. We evaluate average cost scenarios alongside low and high scenarios for each region, reflecting the diverse energy landscapes and policy environments. 

Fill in the form to receive complimentary copies of the executive summaries from our European, Asia-Pacific, North American and Latin American reports and read on for a brief introduction to the LCOE developments in each region: 

Europe 

We estimate the European LCOE for commercially distributed solar power to decline by 49% from current levels by 2060, while residential photovoltaic (PV) will shrink 41%. Unfavourable economies of scale, high customer acquisition costs and sub-optimal site availability will limit the extent of LCOE improvements for distributed solar PV compared with large-scale solar PV across the continent. However, digitalisation promises to bring commercial costs down significantly. 

We project the onshore wind LCOE to fall 16% over the rest of the decade. The offshore wind LCOE will rise through the early 2030s as tight supply chains push up component prices. Towards the mid- to late 2030s, offshore wind cost reductions will once again gain momentum, as supply and demand ease and technology standardisation improves efficiency. 

Fill in the form on this page to receive the full executive summary from our European report. 

Asia Pacific 

Costs for solar power and onshore wind, alongside battery storage, will decline by more than 50% in the Asia Pacific region by 2060, forging a massive economic advantage over increasingly pricey fossil-fuel generation. To facilitate the projected rise of renewables and storage from 45% of current installed capacity to 80% by 2050, the region requires an estimated US$6.5 trillion in capital investment between 2026 and 2050. 

Utility-scale solar PV remains the lowest-cost generation option across the region. The LCOE is projected to range from a low of US$27/MWh (in China) to a high of US$118/MWh (in Japan) in 2025, declining to a range of US$20/MWh to US$104/MWh by 2030. While commercial and residential solar LCOE is also falling, these smaller systems face obstacles from higher soft costs and greater regional policy variations relative to utility projects. 

Fill in the form above to receive a complimentary copy of the executive summary from our Asia Pacific report. 

North America 

Changes to LCOE rankings, the abolition of tax credits for wind and solar technologies in the US from the One Big Beautiful Bill Act and the impact of tariffs are currently putting upward pressure on LCOEs. However, they remain lower than for other options and we expect costs for renewable technologies in North America to trend downwards through 2060, despite policy headwinds. 

New US tariffs have raised short-term solar capital costs, but improving module, inverter and tracker technologies will weigh on prices in the long term. Wood Mackenzie expects such technological improvements to cut the long-term commercial solar LCOE by 25% by 2060. Similarly, capital costs for residential solar will increase short term. The US will sunset solar investment tax credits after 2025, but improving technology will more than offset these cost increases over time.  

Fill in the form at the top of the page to receive the full executive summary from our North American report. 

Latin America 

In 2025, single-axis solar PV had the lowest average LCOE in Latin America for utility-scale generation, with mature markets such as Brazil, Chile and Mexico posting the lowest LCOE values in the region. High capacity factors, decreasing capital costs and technology improvements will lower the regional LCOE by 43% for single-axis tracker PV by 2060. 

Meanwhile, after peak costs in 2024, the regional average LCOE of onshore wind will drop 42% between 2025 and 2060, by our estimates, due to a decline in capital expenditure (capex) and efficiency gains made by larger turbines. Cheaper equipment from Chinese turbine manufacturers will intensify competition as they expand their footprint in Latin America. However, rising costs of labour, spare parts and logistics will not allow operational expenditure (opex) to match capex rates. 

To receive the full executive summary from our Latin American report, fill in the form on this page. 

Find out more 

To download the full executive summary from each of our regional LCOE reports, simply fill out the form on this page.  

These reports are part of Wood Mackenzie’s comprehensive global LCOE analysis, offering insights into Asia Pacific, North America, Europe, the Middle East, Africa and Latin America. 

Additional datasets with deeper insights accompany our reports and are available through client subscriptions. Clients can access all global data through our Lens Power & Renewables platform.