A new report by the U.S. Energy Information Administration explains how a dramatic fall in the cost of solar panels has allowed that technology to sweep the U.S. power grid.
The second largest source of new power generation in 2016, solar energy costs came down by close to a third between 2013 and 2016, at the same time construction costs for natural gas plants rose slightly, according to the EIA.
With construction costs of $2,436 per kilowatt hour, solar has turned into a relative bargain for developers, who can not only claim a federal tax benefit but also avoid the long-term and volatile fuel costs associated with coal and gas plants. Gas plant construction averaged $895 per kWh.
“Crystalline silicon has become the most widely used photovoltaic technology as the technology has matured and construction cost have dropped. Its installed costs declined $400-$500/kW per year to $1,000/kW lower than that of thin film as a result of demand and economies of scale,” the report reads.
Wind power, the largest source of new generation in 2016, came down from close to $2,000 per kWh in construction costs in 2013 to $1,630 in 2016.