Solar facility construction costs decreased in 2017

Construction costs for utility-scale solar photovoltaic systems continued to fall as costs for onshore wind turbines and natural gas generators rose in 2017, according to the U.S. Energy Information Administration (EIA). These three-generation technologies accounted for more than 97% of total capacity added to the grid in the United States in 2017.

Since 2013, average costs for solar photovoltaic generators have fallen 37%, wind by 13%, and natural gas by 4.7%. Total investment in U.S. electric generating capacity in 2017 fell 27% from 2016.

Solar photovoltaic generators cost more to install than wind and natural gas generators on a dollar-per-kilowatt basis, according to the EIA. Solar photovoltaic generators accounted for a larger share of all new electricity generation construction costs in the United States in 2017 and comprised 37% of total investment. U.S. developers spent nearly $12 billion in construction costs on solar photovoltaic plants and added 5 gigawatts of electricity generation capacity. U.S. developers invested less in constructing natural gas and wind generators, but they added 10.5 gigawatts and 5.8 gigawatts of capacity from these sources, respectively.

The cost decrease of solar photovoltaics can be attributed to the decreasing costs in crystalline silicon axis-based tracking panels, which had an average construction cost of $2,135 per kilowatt in 2017. Crystalline silicon axis-based tracking panels comprised more than half of the solar photovoltaic capacity added in 2017 at 2.6 gigawatts of added generating capacity.

Wind capacity additions fell 34% in 2017, but the average construction cost for onshore wind farms were stable at $1,647 per kilowatt. Average costs for wind farms in 2017 were similar to the 2016 average because fewer large farms were built in 2017.

Total natural gas electric generator capacity additions in the United States rose 11% in 2017. Natural gas electric generating capacity rose as a result of additions of combined-cycle facilities, which more than doubled in 2017. Average combined-cycle technology construction costs fell 11% in 2017 to $896 kilowatts, but total investments in the construction of natural gas generators rose 36% because of a rise in added capacity.