Installation costs fall for solar, wind capacity; rise for natural gas plants

Construction costs for solar photovoltaic systems and onshore wind turbines fell in 2016, while the costs for natural gas generators rose, according to the latest data from the U.S. Energy Information Administration. The previous three sources of energy generation accounted for 93% of total electric generating capacity that was added in 2016. In the United States, investment into electric generating capacity rose more than 50% in 2016, from 2015.

Between 2013 and 2016, average construction costs for solar photovoltaic systems have fallen 34.3% to $2,436 per kilowatt, from $3,705 kilowatt. In 2016, nearly 500 photovoltaic systems, totaling 8 gigawatts, were added to the electric grid, and after wind turbines, the systems were the second-most common technology installed.

Crystalline silicon has become the most widely used photovoltaic technology, and its installed costs have fallen between $400 and $500 per kilowatt annually to $1,000 kilowatt less than thin film. In 2016, crystalline silicon solar systems with tracking technology were the most-added and least expensive solar system technology installed, at $2,243 per kilowatt.

Between 2013 and 2015, fixed-tilt mounting solar systems cost less than axis-based tracking systems, but in 2016, axis-based tracking systems cost less.

In early 2018, U.S. tariffs were placed on imported silicon solar cells and modules, and the impact on costs is unknown, according to the EIA. Solar cells are the units or wafers that convert sunlight into electricity, and a collection of these cells that are connected comprise of a module or panel. Solar panels are installed in arrays, or rows of panels, and along with hardware such as an inverter, make up an installation.

In 2016, utilities added 84 wind turbine projects, totaling 8.8 gigawatts, to the electric grid. Between 2015 and 2016, construction costs for onshore wind generators fell to $1,630 per kilowatt. In 2016, 89% of wind turbines that were added to the grid were at sites with more than 100 megawatts of generating capacity.

In 2016, 100 natural gas-fired generators, totaling 9.8 gigawatts, were added to the grid. Costs rose 10.2% to $895 per kilowatt in 2016, from $812 per kilowatt in 2015. Combustion turbines, the least expensive natural gas generating technology, accounted for 3.6 gigawatts of the capacity added in 2016. Combined-cycle systems accounted for 5.7 gigawatts of capacity added in 2016. Construction costs for the systems are nearly $300 per kilowatt more than combustion turbines, but the improved efficiency of the combined-cycle systems might make them more economical.