Utility-Scale Solar: Empirical Trends in Project Technology, Cost, Performance, Value, and PPA in the U.S.
Objective: 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.
Methods: 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 812 projects (30.9GWac) that achieved a commercial operations date at the end of 2019, 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.
Results: Tracking c-Si installations have extended their lead in 2019 annual installations as most ubiquitous technology choice and about 88% of all new installations now feature single-axis tracking capabilities. After declining for five consecutive years the median long-term average insolation at newly built project sites increased again in 2019. Tracking installations continue to be built primarily in higher-insolation regions, with fixed-tilt installations retracting increasingly to regions with less than 4kWh/m2/day. Capital costs have declined to $1.2/Wdc or 1.4/Wac for the median 2019 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 13.5% to 35.5% with a median of 24.4%. Recently negotiated PPA prices of most projects are now below $40/MWh, with a several even below $20/MWh. Falling PPA prices have been matched by a decline in the wholesale market value of solar within higher-penetration markets like California, where solar earned just 75% of the average energy and capacity price within CAISO’s market in 2019. In 11 out of the 17 other balancing areas in the US, solar still provides above-average value. Adding battery storage is one way to increase the value of solar (95% of newly 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 10% of PV capacity up to $20/MWh for batteries sized at 90% of PV capacity. Looking ahead, the 367GW of utility-scale solar capacity in the development pipeline suggests a significant expansion of the industry.