Technical Classification
Definition
Fraunhofer ISE reference study on Levelized Cost of Electricity (LCOE) for renewable energy in Germany. Updated annually with site-specific data. The German standard reference for economic comparisons.
Technical Background
LCOE Germany 2024: Solar (ground-mounted) 4.1–7.2 ct/kWh, Wind onshore 4.3–8.0 ct/kWh, Wind offshore 7.0–11.5 ct/kWh, Lignite 10.5–15.4 ct/kWh, Gas CCGT 8.5–14.0 ct/kWh. LCOS for BESS: 10–18 ct/kWh (depending on application). Arbitrage spreads between solar minimum and evening peak as the basis for BESS economics.
Risks
LCOE does not capture system value (temporal availability, flexibility). Declining solar LCOE compresses arbitrage spreads in the long term. Negative electricity prices reduce reference revenues. Merit order effect changes price structure.
Standards & Regulations
VDI 2067 (Economic Calculation), IEC TS 62862-1-1 (LCOE Methodology), Fraunhofer ISE proprietary methodology (peer-reviewed), EEG auction benchmark.
Testing Methods
Site-specific yield simulation. Capital cost modeling (WACC by technology and risk profile). Degradation/lifetime modeling. Sensitivity analysis for critical parameters. Comparison with auction results as validation.
Common Deficiencies
LCOE neglects system integration costs. No representation of flexibility value and storage synergies. Auction results often below LCOE (strategic bidding). BESS degradation conservatively estimated.
Relevance for Investors, Insurers & Operators
Investors: Benchmark for return expectations and asset comparison. Insurers: Reference for yield assessment plausibility checks. Operators: Positioning in cost comparison and arbitrage spread calculation.
Assessment by PV-BESS-Assessor
The Fraunhofer ISE LCOE study is the German reference for levelized cost of electricity. Annually updated with site-specific data.
Impact on Investors
Contextualizes BESS: Against which costs does BESS compete? Declining solar LCOE increases the economics of solar+storage. Relevant for merchant revenues.
Impact on Assessments
PV-BESS-Assessor uses Fraunhofer LCOE as a benchmark: How does LCOS compare? Are arbitrage models viable at given spreads?
Technical Risks
LCOE does not fully capture system value. Declining solar LCOE can compress arbitrage spreads. Negative electricity prices reduce reference costs.
Regulatory Significance
LCOE data is used in tender design. Relevant for the question of BESS market viability without subsidies.
Conclusion by PV-BESS-Assessor
PV-BESS-Assessor recommends Fraunhofer LCOE as the standard reference. Site-specific data enables precise positioning of BESS economics.
Last updated: 2026-06-16