Construction costs for US solar generation still falling

20 July 2021

The annual capacity-weighted average construction costs for solar photovoltaic systems in the United States continued to decrease in 2019, dropping by a little less than 3%, according to the latest data from the US Energy Information Administration on newly constructed utility-scale electric generators. The average costs for wind turbines remained relatively stable in 2019, increasing $9/kW, or a little less than 1% from the 2018 average. Costs for natural gas-fired generators showed the largest change from 2018 to 2019, increasing $241/kW, or almost 29%. 

Together, these technologies accounted for over 98% of the total capacity added to the US electric grid in 2019. US investment in all forms of new electric-generating capacity in 2019 decreased by 4.9% compared with 2018. 

Solar construction costs averaged $1796/kW in 2019, a 2.8% decrease from 2018. The decrease was driven by falling costs for crystalline silicon axis-based tracking panels, which fell to $1497/kW in 2019. Crystalline silicon axis-based tracking panels made up almost half of the solar capacity added in the United States in 2019, at 2.5 GW. Among solar technologies, crystalline silicon fixed-tilt panels had the highest average cost in 2019, at $2242/kW. 

Total U.S. wind capacity additions were 39% greater in 2019 than in 2018, although the average construction cost for onshore wind turbines remained about the same. The average construction cost for onshore wind turbines was $1391/kW in 2019, compared with $1382/kW in 2018. 

The average construction cost for wind farms with more than 200 MW of capacity, which accounted for the largest share of wind capacity additions in 2019, decreased by 1.3% to $1252/kW. 

Among wind, solar, and natural gas technologies, natural gas received the least US investment in 2019, accounting for 26% of total electric-generating capacity investment across all energy sources. Most natural gas electric-generating capacity installed in 2019 was in combined-cycle facilities. Average combined-cycle construction costs increased from $858/kW in 2018 to $948/kW in 2019, a 10% increase. 

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