Large solar installations supplying energy to the grid are on a tear, according to the 2021 Utility-Scale Solar report from the Lawrence Berkeley National Laboratory.
Utility-scale projects—ground-mounted projects that are larger than 5 megawatts (MW)—have the greatest capacity share in the U.S. solar market, according to the report. For 2020, the sector added 14 gigawatts (GW), or 73% of all new solar capacity.
“It was the year with the greatest utility-scale solar capacity expansion in the United States so far, representing a year-over-year growth of 65%,” the authors wrote.
For all project sizes, solar power was the second largest source of U.S. electricity-generating capacity additions in 2020—making up 38% of new capacity last year, behind wind (42%) but ahead of natural gas (19%).
In 2020, Texas led the nation in utility-scale solar deployment, completing some of the largest projects up to 410 MW, while Wisconsin and Louisiana added their first utility-scale photovoltaic projects. Overall, utility-scale solar has become a growing source of electricity in all regions of the country.
“Utility-scale PV is well-represented throughout the nation, with the exception of upper-Midwestern states in the ‘wind belt,’” according to the report. “Recent recipients of new utility-scale solar projects in the north—Idaho and Minnesota—did not add new capacity in 2020, while Montana, the Dakotas, Iowa, New Hampshire, and West Virginia still await their first utility-scale solar projects.”
Projects using single-axis tracking have consistently exceeded fixed-tilt installations since 2015 but achieved “a new level of dominance” in 2020, with 89% of all new capacity using tracking, according to the report. Upfront cost premiums for trackers have fallen over the years, resulting in favorable economics in most of the country because of increased generation. Tracking also boosts capacity factors by up to 5 percentage points in regions with high insolation (the amount of solar energy received on a surface during a given period).
“Not surprisingly, capacity factors are highest in California and the non-ISO West, and lowest in the Northeast,” the authors wrote. “Tracking provides more benefit in high-insolation regions, leading to a greater proportion of tracking projects in those regions.”
Meanwhile, utility-scale PV’s average levelized cost of energy (LCOE) has fallen by 85% (or 17% annually) since 2010, to $34 per megawatt-hour (MWh). (This figure excludes ITC Holdings Corp. data.) This has been driven by lower capital costs and, at least through 2013, higher capacity factors, as well as lower operating expenses, longer design life and improved financing terms.
Levelized power purchase agreement (PPA) prices have followed LCOE and have been lower in all regions. Most recent PPAs are priced around $20/MWh for projects in the California ISO and the non-ISO West, and $30 to $40/MWh for projects elsewhere in the continental United States, while Hawaiian PPAs are often priced higher.
Nationwide, average PPA prices have fallen by roughly 85% since 2009, about 15% per year, though the pace of decline has recently stagnated. Solar PPA prices are now often competitive with wind PPA prices, as well as the cost of burning fuel in existing gas-fired generators.
For PV+battery hybrid plants, the median reported battery costs among 11 projects with a 2019 commercial operations date was $1,100 per kilowatt-hour, representing a median cost adder of $1.54 per watt, or 48% of overall hybrid project installed costs. For these projects, the median battery capacity is 60% of the PV capacity and can release energy at rated power for a little more than two hours. PPA prices for PV+battery hybrids have declined over time, although Hawaii priced at a premium.
Looking ahead, the authors found strong growth in the utility-scale solar pipeline, with 460 GW of solar projects in the queues at the end of 2020—170 GW of which entered the pipeline last year. A third of the projects include a battery in a PV-hybrid configuration.
“Solar—both standalone and in hybrid form—is by far the largest resource within these queues, roughly equal to the amount of wind, storage and natural gas combined,” the authors wrote.