U.S. construction costs drop for solar, rise for wind and natural gas generators

Construction costs for solar systems dropped in the United States in 2020; the capacity-weighted average fell 8 per cent compared with 2019.

As construction costs fall for solar power installations, average construction costs for both wind turbines and natural gas-fired generators increased compared with 2019, by 8 per cent for wind and 4 per cent for natural gas. Quantum Tech HD photo via YouTube.

This article was published by the US Energy Information Administration on Nov. 3, 2022.

By Alex Mey

Construction costs for solar photovoltaic systems continued to decrease in the United States in 2020; the capacity-weighted average fell 8 per cent compared with 2019, according to the latest data in our Annual Electric Generator Report on newly constructed utility-scale electric generators. By contrast, average construction costs for both wind turbines and natural gas-fired generators increased compared with 2019, by 8 per cent for wind and 4 per cent for natural gas.

U.S. capacity-weighted average utility-scale construction cost by technology

Data source: U.S. Energy Information Administration, Electric Generator Construction Costs and Annual Electric Generator Inventory

These three technologies—solar, wind, and natural gas—accounted for over 95 per cent of the capacity added to the U.S. electric grid in 2020. Investment in new electric generating capacity in 2020 increased by 40 per cent compared with 2019 to $46.3 billion dollars.

Solar
Average solar construction costs across all solar panel types fell 8 per cent to $1,655 per kilowatt (kW) in 2020. The decrease was primarily driven by a 17 per cent drop in the construction cost for cadmium telluride tracking panels, which fell to $1,631 per kW, their lowest capacity weighted average cost since 2014.

The average construction cost for crystalline silicon fixed-tilt panels fell by 13 per cent , although they were still the most expensive of the major solar technologies, at $1,957 per kW.

The majority of solar panels installed in the United States are crystalline silicon tracking panels. Unlike fixed-tilt systems, solar tracking systems move to follow the sun as it moves across the sky, allowing for greater electricity production. A majority of tracking panels in the United States are single-axis tracking systems. In 2020, crystalline silicon tracking systems accounted for 61 per cent of the utility-scale solar capacity added to the U.S. power grid. Construction costs for these systems increased by 6 per cent in 2020, settling at $1,587 per kW.

Average U.S. construction cost for solar photovoltaic systems

Data source: U.S. Energy Information Administration, Electric Generator Construction Costs and Annual Electric Generator Inventory

Wind
The average construction cost for onshore wind turbines rose 8 per cent in 2020 from $1,391 per kW in 2019 to $1,498 per kW.

The two largest wind-farm size groups accounted for 95 per cent of the wind capacity added to the U.S. power grid in 2020. The average construction cost for the largest wind farms—those with more than 200 megawatts (MW) of capacity—increased by 11 per cent to $1,393 per kW. Wind farms ranging from 100 MW to 200 MW were the only group to decrease in average construction costs in 2020, from $1,615 per kW in 2019 to $1,531 per kW in 2020, down 5.2 per cent .

Wind farms with 1 MW to 100 MW of capacity had an average construction cost increase of 53 per cent to $2,530 per kW in 2020.

Average U.S. construction cost for wind farms average

Data source: U.S. Energy Information Administration, Electric Generator Construction Costs and Annual Electric Generator Inventory

Natural gas
The average construction cost for natural gas-fired generating plants rose 4 per cent from 2019 to 2020. The majority of natural gas electric-generating capacity installed in 2020 came from combined-cycle facilities. The average combined-cycle generator construction cost increased by 22 per cent in 2020 to $1,155 per kW, up from $948 per kW in 2019.

Average construction costs for natural gas-fired generators

Data source: U.S. Energy Information Administration, Electric Generator Construction Costs and Annual Electric Generator Inventory

 

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