Reaching climate targets requires a massive build-out of renewable energy (RE), the cost of which is critical to the feasibility and speed of this build-out. As demonstrated in energy system modelling, the weighted average cost of capital (WACC) of RE is an important factor in determining the cost competitiveness of RE compared to fossil fuel-based alternatives. Research has found substantial differences in WACCs between countries, technologies, and across time with implications for the cost and feasibility of the energy transition. However, obtaining up-to-date WACC values for modelling remains challenging because information is typically constrained to investors, and the elicitation is time-consuming and costly. In this paper, we develop an open-access tool to calculate the WACC by country and year for utility-scale onshore wind, offshore wind, and solar photovoltaics (PV) investments. Using two different approaches, we calibrate the tool with the most extensive available empirical WACC dataset for renewables. Our tool can help improve energy system modelling, which is particularly important in data-scarce regions of the world, many of which are expected to see considerable energy demand growth over the coming years. • Open-access tool estimates weighted average cost of capital (WACC) for renewables by country, year, and technology. • Calibrated using 439 empirical WACC data points from 86 countries (2008–2023). • Tool improves accuracy with optimised region and technology-specific premia. • Valuable for energy modelling in data-scarce regions with high potential for renewables.
Wildgruber et al. (Fri,) studied this question.