Construction costs for solar photovoltaic systems continued to decrease in the United States in 2020; the capacity-weighted average fell 8% compared with 2019, according to the latest data in U.S. Energy Information Administration’s (EIA) Annual Electric Generator Report on newly constructed utility-scale electric generators. By contrast, average construction costs for both wind turbines and natural gas-fired generators increased compared with 2019, by 8% for wind and 4% for natural gas.
These three technologies – solar, wind and natural gas – accounted for over 95% of the capacity added to the U.S. electric grid in 2020. Investment in new electric generating capacity in 2020 increased by 40% compared with 2019, to $46.3 billion dollars.
The average construction cost for onshore wind turbines rose 8% in 2020 from $1,391 per kW in 2019 to $1,498 per kW.
The two largest wind-farm size groups accounted for 95% of the wind capacity added to the U.S. power grid in 2020. The average construction cost for the largest wind farms—those with more than 200 megawatts (MW) of capacity – increased by 11% to $1,393 per kW. Wind farms ranging from 100 MW to 200 MW were the only group to decrease in average construction costs in 2020, from $1,615 per kW in 2019 to $1,531 per kW in 2020, down 5.2%.
Wind farms with 1 MW to 100 MW of capacity had an average construction cost increase of 53% to $2,530 per kW in 2020.
The average construction cost for natural gas-fired generating plants rose 4% from 2019 to 2020.
The majority of natural gas electric-generating capacity installed in 2020 came from combined-cycle facilities. The average combined-cycle generator construction cost increased by 22% in 2020 to $1,155 per kW, up from $948 per kW in 2019.