Berkeley Lab’s latest “Utility-Scale Solar” report sees continued growth and falling costs for big solar

October 5, 2021

We are pleased to release the 2021 edition of Berkeley Lab’s Utility-Scale Solar report, which presents analysis of empirical project-level data from the U.S. fleet of ground-mounted photovoltaic (PV), PV+battery, and concentrating solar-thermal power (CSP) plants with capacities exceeding 5 MWAC. While focused on key developments in 2020, this report explores trends in deployment, technology, capital and operating costs, capacity factors, the levelized cost of solar energy (LCOE), power purchase agreement (PPA) prices, and wholesale market value among the fleet of utility-scale solar (and solar+storage) plants in the United States.

Key findings from this year’s report include:

  • A record of nearly 9.6 GWAC of new utility-scale PV capacity came online in 2020, bringing cumulative installed capacity to more than 38.7 GWAC across 43 states. Texas (2.5 GWAC) and Florida (1.64 GWAC) added the most new capacity, deposing California (1.61 GWAC) as the largest state market for the first time ever.

  • Projects that track the sun throughout the day continue to outnumber fixed-tilt projects, with single-axis tracking employed by 89% of all new utility-scale PV capacity added in 2020.
  • Median installed project costs from a 5.1 GWAC sample of 68 plants completed in 2020 declined to $1.4/WAC (or $1.1/WDC), with the lowest 20th percentile at or below $1.1/WAC (or $0.9/WDC). Median installed costs have fallen by nearly 75% (averaging 12% annually) since 2010.
  • Project-level capacity factors vary widely, from 9% to 36% (on an AC basis), with a sample median of 24%. The high degree of project-level variation is based on a number of factors, including insolation, tracking vs. fixed-tilt, inverter loading ratios, performance degradation, and curtailment—all of which are explored in detail in the report.
  • Driven by lower capital costs and improving capacity factors (as well as other factors), utility-scale PV’s LCOE has fallen by about 85% on average (averaging 17% annually) since 2010, to $34/MWh in 2020 ($28/MWh if factoring in the federal investment tax credit, or ITC).
  • PPA prices have largely followed the decline in solar’s LCOE over time, but have stagnated more recently. PPA prices from a sample of contracts signed in 2019 or 2020 average just above $20/MWh (levelized, in 2020 dollars).

  • Although solar’s “duck curve”-related decline in wholesale market value within California has been much publicized, in many other regions of the country, solar still provides above-average value (as denoted by a “value factor” greater than 100% in the graph below). In 2020, solar’s average market value (defined here and in the report to include only energy and capacity value) exceeded average wholesale prices in 12 of the 17 balancing authorities analyzed (including 4 of the 7 independent system operators (ISOs) across the United States). However, even in California (i.e., CAISO), where solar’s average market value has steadily declined over time to 70% of average wholesale prices in 2019 and 2020, falling PPA prices have largely kept pace, thereby more or less maintaining solar’s competitiveness. Solar in other regions offers higher value yet similar (or even lower) PPA price levels, which may be one reason why the market has been shifting away from California and into other less-sunny regions.

  • Adding battery storage to shift a portion of excess mid-day solar generation into evening hours is one way to increase the value of solar. These PV+battery hybrid projects are becoming increasingly common, particularly in high-penetration markets like Arizona, California, Hawaii, and Nevada. Our public data file tracks metadata for more than 150 PV+battery hybrid projects that are already online or that have secured offtake arrangements; we present PPA price data for 47 of these hybrids. More speculatively, but also a harbinger of things to come, nearly 160 GW of PV+storage projects were in the interconnection queues across the country at the end of 2020, accounting for 34% of all solar capacity in the queues at that time.

The full Utility-Scale Solar report (in slide deck format), along with an accompanying technical brief, a data file, and a number of interactive data visualizations, can be found at utilityscalesolar.lbl.gov.

The report authors will summarize key findings from the report via a free webinar on Tuesday, October 12, at 10 AM Pacific/1 PM Eastern. Register here: https://lbnl.zoom.us/webinar/register/WN_CnwNJMlVQo25Dq7SreOjVg

For questions on the report, feel free to contact Mark Bolinger (MABolinger@lbl.gov) or Joachim Seel (JSeel@lbl.gov) at Lawrence Berkeley National Laboratory.

We appreciate the funding support of the U.S. Department of Energy Solar Energy Technologies Office in making this work possible.

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