Utility-scale solar costs down by half in last five years alone

Earlier this week, Lawrence Berkeley National Labs released a report on the state of utility-scale solar installations in the US. Just about everything in the report is remarkable for anyone who's followed the solar market closely. Over the past five years, prices have dropped by half, while the capacity factors are approaching that of wind. As a result, the most recent installations are offering power at prices that are competitive with natural gas—not the cost of the plant and fuel, but the fuel alone.

In 2014, utility-scale solar projects added about 4GW of capacity to the US grid. Slightly more than 6GW of solar capacity was added in total, with the remainder split between commercial and residential installs. Due to the rapid drop in prices, the majority of this capacity is in the form of photovoltaic panels.

One of the issues with utility-scale solar has been that some of the earlier plants were built outside the Southwest. This has meant less overall generation and a lower capacity factor, meaning that the panels are only producing power at a fraction of their maximal rate. Both of these raise the cost of the electricity generated. But installations in the Southwest have boomed to over 90 percent of the total installed hardware. This has capacity factors up and costs down. More recently, large projects have been getting more popular in the Southeast, which may change this dynamic in the future.