Utility-Scale Solar 2015: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States
The utility-scale solar sector has led the overall U.S. solar market in terms of installed capacity since 2012. This report—the fourth edition in an ongoing annual series—provides data-driven analysis of the utility-scale solar project fleet in the United States. We analyze not just installed project costs or prices, but also operating costs, capacity factors, and power purchase agreement (“PPA”) prices from a large sample of utility-scale solar PV and CSP projects throughout the United States.
Some of the more-notable findings from this year’s edition include the following:
- Installation Trends: The use of solar tracking devices continued to expand in 2015. In a reflection of the ongoing geographic expansion of the market beyond the high-insolation Southwest, the average long-term insolation level across newly built project sites declined for the first time in 2015. Meanwhile, the average inverter loading ratio has increased among more recent project vintages, to 1.31.
- Installed Prices: Median installed PV project prices within a sizable sample have steadily fallen by nearly 60% since the 2007-2009 period, to $2.7/WAC (or $2.1/WDC) for projects completed in 2015. The lowest 20th percentile of projects within our 2015 sample were priced at or below $2.2/WAC, with the lowest-priced projects around $1.7/WAC.
- Operation and Maintenance (“O&M”) Costs: PV O&M costs (from a very small sample of projects) were in the neighborhood of $15/kWAC-year, or $7/MWh, in 2015. These numbers include only those costs incurred to directly operate and maintain the generating plant, but exclude property taxes, insurance, land royalties, performance bonds, various administrative and other fees, and overhead.
- Capacity Factors: Project-level AC capacity factors range widely, from 15.1% to 35.7%, with a sample median of 26.4%. This variation is based on the strength of the solar resource at each project site, whether the array is mounted at a fixed tilt or on a tracking mechanism, the inverter loading ratio, and likely degradation. Improvements in these factors have driven mean capacity factors higher over the last four years, to nearly 27% among 2014-vintage projects.
- PPA Prices: Driven by lower installed project prices and improving capacity factors, levelized PPA prices for utility-scale PV have fallen dramatically over time. Most PPAs in the 2015 sample are priced at or below $50/MWh levelized, with a few priced as aggressively as ~$30/MWh. Even at these low price levels, PV may still find it difficult to compete with existing gas-fired generation, given how low natural gas prices have fallen over the past year. When stacked up against new gas-fired generation, PV looks more attractive—and in either case can also provide a hedge against possible future increases in fossil fuel costs.
At the end of 2015, there were at least 56.8 GW of utility-scale solar power capacity in interconnection queues across the nation. The growth within these queues has come primarily from Texas and the Southeast, Central, and Northeast regions, which is a clear sign that the utility-scale market is maturing and expanding outside of its traditional high-insolation comfort zones of California and the Southwest.