The cost of power for new onshore wind and solar ticked up in the first half of the year as inflationary pressures took their toll – but the rise should be temporary and fossil alternatives are more expensive than ever, said analysts at BloombergNEF.

The research group’s global benchmark for new-build onshore wind rose 7% year-on-year to $46/MWh and fixed-axis PV 14% to $45/MWh in the first half of 2022.

The increases came as the industry grappled with a range of challenges including supply chain costs and constraints that are a hangover of the pandemic, exacerbated by the invasion of Ukraine.

Despite the rises, both sources were still hugely cheaper than in 2010 and their cost advantage over new coal and gas power widened, with the two fossil sources put at $74 and $81 per MWh, respectively.

Amar Vasdev, a co-author of the report at BNEF, said: “These cost hikes mark a rough patch for renewables, but not an inflection point. We see a return to long-term technology cost decline trajectories as demand continues to be strong, supply chain pressures ease and production capacity, particularly in China, comes back online.”

The global figures masked big regional variations. The cheapest new onshore wind tracked by BNEF in the first half was in Brazil with a levelised cost of energy of $19/MWh, $21/MWh for a tracking solar project in Chile and $57/MWh for offshore wind in Denmark, or $43/MWh if offshore transmission costs are excluded.

Battery storage projects also saw a rise in the first half to a benchmark $153/MWh, up 8.4% year-on-year, pushed higher by factors such as prices for lithium carbonate that have spiked 379% over the past 12 months, said BNEF.