This article was published by the US Energy Information Administration on Oct. 3, 2023.
By Alex Mey
The average construction costs for solar photovoltaic systems, wind turbines, and natural gas-fired electricity generators all decreased in the United States in 2021 compared with 2020, according to our recently released data. Average construction costs fell by 18 per cent from 2020 for natural gas-fired generators, by 5 per cent for wind turbines, and by 6 per cent for solar photovoltaic systems.
These three technologies—solar, wind, and natural gas—made up more than 91 per cent of the capacity added to the U.S. electric grid in 2021. Investment in new electric-generating capacity in 2021 increased by 10 per cent from 2020 to $50.8 billion dollars.Generator cost data are reported to EIA through Form EIA-860, Annual Electric Generator Report. The costs discussed in this article reference the Electric Generator Construction Costs web page, which organizes the nominal construction cost values for generators installed in each reporting year. The recently released data examine trends from past years. Discussion of additional cost information and trends can be found in the Short-Term Energy Outlook.
Average U.S. solar construction costs across all solar panel types fell 6 per cent to $1,561 per kilowatt (kW) in 2021. The decrease was primarily driven by a 10 per cent drop in the construction cost for crystalline silicon tracking panels, which fell to $1,423/kW, their lowest average cost since 2014.
The average construction cost for crystalline silicon fixed-tilt panels increased by 5 per cent, making them the most expensive of the major solar technologies at $2,047/kW. The average cost for Cadmium telluride panels remained relatively stable, decreasing only 1 per cent to $1,626/kW in 2021.
Most solar panels installed in the United States are crystalline silicon tracking panels. Unlike fixed-tilt systems, solar tracking systems automatically move to follow the sun as it moves across the sky, allowing more continuous sun exposure and, therefore, greater electricity production. In 2021, crystalline silicon tracking systems accounted for 56 per cent of the utility-scale solar capacity added to the U.S. power grid.
The average construction cost for U.S. onshore wind turbines fell 5 per cent in 2021 to $1,428/kW. The average construction costs for all three wind turbine size groups decreased slightly in 2021. The cost for the largest wind farms—those with more than 200 megawatts (MW) of capacity—remained relatively flat, decreasing by 1 per cent to $1,382/kW. Wind farms ranging from 100 MW to 200 MW also decreased in average construction costs to $1,464/kW in 2021, down 4.4 per cent. Average construction costs for wind farms with 1 MW to 100 MW of capacity decreased by 22 per cent to $1,949/kW in 2021.
The average construction cost for natural gas-fired generators fell 18 per cent between 2020 and 2021. The decrease in average cost for natural gas-fired generators was driven primarily by decreases in the cost for combustion turbines. The average construction cost for combustion turbines fell by 19 per cent in 2021 to $512/kW in 2021.
The average combined-cycle generator construction cost increased by 8 per cent in 2021 to $1,252/kW.