Wave energy currently costs between $0.35 and $0.85 per kilowatt-hour, with an average around $0.57/kWh. That makes it roughly 5 to 10 times more expensive than solar or onshore wind power, which typically fall below $0.05/kWh. Wave energy is the most expensive form of renewable electricity available today, though costs are expected to drop significantly as the technology matures.
What the Numbers Actually Mean
Energy costs are measured using something called the levelized cost of energy, or LCOE. This takes every expense involved in building, running, and eventually decommissioning a power plant, then divides it by the total electricity produced over the project’s lifetime. It’s the standard way to compare different energy sources on equal footing.
A National Renewable Energy Laboratory (NREL) study based on expert estimates put wave energy’s average LCOE at $0.57/kWh, plus or minus $0.18. The wide range, from $0.35 at the low end to $0.85 at the high end, reflects how much variation exists between different device designs, ocean locations, and project scales. Most wave energy projects today are small demonstrations rather than commercial-scale farms, which keeps per-unit costs high.
For comparison, utility-scale solar in the U.S. now averages around $0.03 to $0.05/kWh. Offshore wind sits around $0.08 to $0.12/kWh. Even offshore wind, which also faces harsh marine conditions, costs a fraction of what wave energy does today.
Why Wave Energy Costs So Much
The expense comes from two main areas: the upfront cost of building and installing the devices (capital expenditure), and the ongoing cost of keeping them running in the ocean (operational expenditure). Both are unusually high for wave energy compared to other renewables.
Building a wave energy converter that can survive the open ocean is an engineering challenge with no settled solution. Unlike wind turbines, which have converged on a standard three-blade design, wave energy devices come in dozens of competing designs. This means manufacturers can’t yet benefit from the kind of mass production that drove down solar panel prices. Every project is somewhat bespoke, and the structural requirements for withstanding storms, saltwater corrosion, and constant mechanical stress add significant material and engineering costs.
Maintenance costs are also steep. Accessing equipment anchored offshore in rough seas is expensive and weather-dependent. Insurance alone accounts for about 11% of annual operating costs, or roughly 1% of the total capital investment, reflecting the real risk of equipment damage or loss. When reliability improves and devices need fewer repairs, operating costs drop, but achieving that reliability often means spending more on the initial build. It’s a balancing act that the industry hasn’t fully optimized yet.
How Wave Energy Compares to Wind and Solar
On raw cost per kilowatt-hour, wave energy loses badly to wind and solar. But raw cost isn’t the whole picture. Research from SINTEF, a Norwegian research organization, found that wave energy delivers electricity that’s worth about 8% more to the grid than wind or solar power. The reason is timing: waves don’t follow the same patterns as wind and sunshine, so wave energy tends to produce power during periods when other renewables aren’t generating as much. That means wave electricity sells at slightly above-average market prices, while wind and solar often flood the market simultaneously and push prices down.
In the SINTEF study, wave energy earned roughly 102% of the average electricity price, while wind earned about 93% and solar about 95%. This value premium means wave energy doesn’t necessarily need to reach exact cost parity with wind and solar to be economically competitive. It just needs to get close enough that the higher market value covers the cost difference. At today’s prices, though, that gap is still far too wide. The value advantage shaves off a few percentage points, not the 500% to 1,000% cost gap that currently exists.
Government Support and Strike Prices
Because wave energy can’t compete on cost alone yet, governments offer guaranteed prices to encourage development. In the UK’s sixth allocation round for renewable energy contracts in 2024, wave energy was offered a strike price of £257 per megawatt-hour (in 2012 prices). That’s roughly $330/MWh, or $0.33/kWh. For context, offshore wind in the same auction round had strike prices closer to £50 to £70/MWh.
These guaranteed prices function as a subsidy, bridging the gap between what wave energy costs to produce and what the market would naturally pay. The logic is similar to what worked for solar and wind decades ago: early government support funds the first commercial projects, which drive down costs through experience and scale, which eventually makes the technology viable without subsidies. Solar panels followed this trajectory from over $0.30/kWh in the early 2000s to under $0.05/kWh today.
Where Costs Are Headed
The NREL expert elicitation gathered projections on how costs might fall as the industry scales up. The key cost drivers that need to improve are device reliability (so maintenance trips happen less often), standardized manufacturing (so devices can be built on production lines rather than one at a time), and mooring and grid connection systems (which represent a large share of installation costs).
Wave energy today is roughly where offshore wind was 15 to 20 years ago: technically proven but commercially expensive, with no dominant design and limited manufacturing infrastructure. Whether it follows the same cost-reduction curve depends on sustained investment. The technology has a meaningful advantage in predictability (waves can be forecast further ahead than wind) and in complementing other renewables on the grid. But translating those advantages into competitive electricity prices will take years of deployment experience that the industry is only beginning to accumulate.