A new report from Berkeley Lab, Utility-Scale Solar, 2024 Edition, provides a comprehensive analysis of the US solar energy landscape, focusing on utility-scale photovoltaic (PV), PV+battery hybrids, and concentrating solar-thermal power (CSP) installations. The report examines key trends and developments in 2023, highlighting significant growth in capacity, falling costs, and the increasing value of solar energy in terms of economic, health, and climate benefits.

The report highlights that by 2023, utility-scale solar energy in the US reached a new milestone, with 18.5 gigawatts (GW_AC) of new PV capacity coming online. This surge brought the total installed capacity to over 80.2 GW_AC, spanning 47 states. This rapid expansion underscores solar's central role in the nation's transition to cleaner energy sources.

Costs continue to decline

One of the most notable trends in 2023 was the continued decline in solar installation costs. Compared to 2022, the capacity-weighted average cost of utility-scale PV projects decreased by 8%, reaching $1.43 per watt (WAC) or $1.08 per watt (WDC). Costs, based on a 7.1 GW_AC sample of 76 plants completed in 2023, have fallen by 75% (averaging 10% annually) since 2010. This consistent downward trend reflects the ongoing improvements in solar technology and efficiencies in utility-scale deployment.

Despite the overall growth, plant-level performance varied significantly across the country. Capacity factors—an indicator of how much energy a solar plant generates relative to its maximum capacity—ranged from 7% to 35%, with a median of 24%. These variations are influenced by geographic location, plant design, and technology.

Levelized cost of energy (LCOE) and power purchase agreements (PPAs)

The report also tracks the Levelized Cost of Energy (LCOE), which provides a measure of the cost competitiveness of new solar projects. In 2023, the LCOE for utility-scale solar projects increased slightly to $46 per megawatt-hour (MWh) before tax incentives. However, with federal tax credits factored in, the LCOE dropped to $31/MWh, making solar one of the most affordable sources of new electricity generation in the US.

Despite the declining cost of solar energy, newly signed long-term Power Purchase Agreement (PPA) prices have seen an uptick since 2021, averaging $35/MWh in 2023. These agreements are crucial for securing stable revenue for solar projects, although the rise in PPA prices reflects broader market conditions, including inflationary pressures and supply chain disruptions.

Solar’s growing market and environmental value

In terms of market performance, solar energy demonstrated significant value in 2023. The average market value of solar energy in the US was $45/MWh, with regional variations ranging from $27/MWh in California (CAISO) to $67/MWh in Texas (ERCOT). Importantly, newer solar projects yielded $1.1 billion in additional value beyond their generation costs, emphasizing the increasing economic viability of solar.

Beyond its market value, utility-scale solar continues to deliver substantial public health and environmental benefits. The report estimates that solar energy provided $13.7 billion in net benefits in 2023 when considering its ability to reduce air pollution and mitigate climate change. On average, the US saw health benefits worth $24/MWh and reduced global climate damage valued at $101/MWh due to solar generation.

The role of battery storage in enhancing solar value

A major development in 2023 was the rapid growth of solar projects paired with battery storage systems. The deployment of 52 new PV+battery hybrid plants added a record 5.3 GW of capacity. Battery storage enables solar energy to be stored and used during periods of peak demand, enhancing the reliability and value of solar power.

Looking ahead, the future of solar energy in the US appears bright. By the end of 2023, over 1,085 GW of solar capacity was in interconnection queues, with 53% of this capacity paired with battery storage. In regions like California, the integration of battery storage is even more pronounced, with 98% of solar projects in the interconnection pipeline designed as hybrids.

The Utility-Scale Solar, 2024 Edition report highlights the remarkable growth of utility-scale solar energy in the US and its evolving role in the country’s energy mix. With record levels of deployment, falling costs, and growing economic, health, and environmental benefits, solar power is positioned to be a cornerstone of the US energy transition. As the nation continues to build out its solar capacity, the integration of battery storage will further enhance the value and reliability of this renewable energy source.