A12 - Utility-scale Solar: Empirical Trends in Project Technology, Cost, Performance, PPA Pricing, and Solar Value in the United States

The objective of our annual investigation of industry developments in the utility-scale solar sector is to provide consistent high-quality data and analysis to keep the audience abreast of market trends at times of enormous industry growth. Our research complements other projects well, such as SEPA’s and SEIA’s annual Solar Market Snapshot and is widely recognized in the industry.

We do original primary data collection from the Energy Information Administration, the Federal Energy Regulatory Commission, incentive programs and regulatory proceedings on the state and federal level, interviews with developers, EPCs, and project owners, ISO electricity market data and 35 interconnection queues around the county. As a result, we have the most comprehensive database on utility-scale solar projects larger than 5MWac in the United States with 1150 projects (53.1GWac) that achieved a commercial operations date at the end of 2021, including technical design specifications, capital costs, O&M costs, project performance, and PPAs. The size of the database allows for a representative sample and robust summary statistics.

Tracking c-Si installations have continued their lead in 2021 annual installations as most ubiquitous technology choice and about 90% of all new solar capacity now feature single-axis tracking capabilities. Due to robust market activities outside of the desert southwest, the median long-term average insolation at newly built project sites declined since its peak in 2013 but has mostly held steady since 2017 around 4.7kWh/m2/day. Capital costs have declined to $1.0/Wdc or 1.3/Wac for the median 2021 projects, the median installed price for tracking projects was barely higher than the median price of a fixed-tilt project. Average Net-Capacity Factors (AC) of individual projects in the sample range widely, from 9% to 36% with a median of 24%. Irradiance-corrected plant-level performance degradation averaged in 2020 to 1.2% per year. All these factors lead to median levelized-cost-of-energy (LCOE) of $34/MWh for new solar installations (or $28/MWh after accounting for the ITC). Recently negotiated PPA prices in CAISO and the non-ISO WEST are around $20/MWh, with $30-40/MWh for projects elsewhere in the US. Falling PPA prices and a recent increase in wholesale market value (ranging on average from $34/MWh to $78/MWh across 17 Balancing Areas in 2021) make solar an attractive purchase option for offtakers. Adding battery storage is one way to increase the value of solar (95% of the proposed CAISO PV capacity now includes batteries). PV hybrid project data suggests that the size of the incremental PPA price adder for 4-hour storage ranges from ~$5/MWh for batteries sized at 25% of PV capacity up to $20/MWh for batteries sized at 100% of PV capacity.

Looking ahead, the 675GW of utility-scale solar capacity in the development pipeline suggests a significant expansion of the industry. Very strong solar growth is expected in all regions, ranging from established markets like the West to relative newcomers like MISO. The non-ISO West, PJM, and CAISO lead the way with more than 250 GWAC each, followed by MISO, ERCOT, SPP, and the non-ISO Southeast, each with ~100-150 GWAC. Nearly all of the newly proposed PV capacity in CAISO is coupled with batteries, foreshadowing how the “standard” solar installation may look like across the country in a few years.